Profits Form
- differences from gross earnings
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1. indemnity period - extends beyond property reinstated
2. By Laws provision - insurance provided by this form extends to any
increase arising out of by laws leading to increased construction costs, but
by no means extends the indemnity period or to increase the amount of
insurance
3. Due Diligence and dispatch - the insured is not responsible for any
delays resulting beyond their ow personal responsibility.
EX - slow approval of building plans, slowness of landlord reinstating
property, strikes or labour disturbances, failure of building contractors to
meet deadlines
4. No coinsurance clause - profits form is intended to cover you for 100% of
coverage required
5. Does not require all continuing expenses to be insured - these expenses
, are called standing coverages on the profits form which are automatically
included on
1. Measure of recovery
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the reduction in gross earnings directly resulting from such interruption of
business, less any costs that would not continue during the operation of the
business
total net sales minus COGS / materials, materials consume directly by the
supplying the services and sold by the insured, and services purchased by
third parties that don't continue during BI
7. Interruption by civil authority
under this peril, coverage is provided when there is damage not to the insured
premise but a neighboring premise if
Coverage is present for how long ?
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1. access to insureds premise is not allowed by civil authority
2. Damage caused to the insureds neighboring premise is covered under
the insureds own policy
** when these 2 are present coverage is provided for 2 weeks
, Obstacles to selling BI coverage
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- It costs a lot
- uncertainty of what it covers (lack of knowledge)
- not wanting to share financial information
- too technical (complicated rules and coverages)
key advantage of BI
*** think legal
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when you have BI coverage you usually do not need to bring about legal
action
Myths of business interruption insurance
1.
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1. the broker must be an accountant to understand BI coverage
- many terms sound the same but can mean differently including gross
profits
- gross earnings is a insurance term not accounting
- differences from gross earnings
Give this one a try later!
1. indemnity period - extends beyond property reinstated
2. By Laws provision - insurance provided by this form extends to any
increase arising out of by laws leading to increased construction costs, but
by no means extends the indemnity period or to increase the amount of
insurance
3. Due Diligence and dispatch - the insured is not responsible for any
delays resulting beyond their ow personal responsibility.
EX - slow approval of building plans, slowness of landlord reinstating
property, strikes or labour disturbances, failure of building contractors to
meet deadlines
4. No coinsurance clause - profits form is intended to cover you for 100% of
coverage required
5. Does not require all continuing expenses to be insured - these expenses
, are called standing coverages on the profits form which are automatically
included on
1. Measure of recovery
Give this one a try later!
the reduction in gross earnings directly resulting from such interruption of
business, less any costs that would not continue during the operation of the
business
total net sales minus COGS / materials, materials consume directly by the
supplying the services and sold by the insured, and services purchased by
third parties that don't continue during BI
7. Interruption by civil authority
under this peril, coverage is provided when there is damage not to the insured
premise but a neighboring premise if
Coverage is present for how long ?
Give this one a try later!
1. access to insureds premise is not allowed by civil authority
2. Damage caused to the insureds neighboring premise is covered under
the insureds own policy
** when these 2 are present coverage is provided for 2 weeks
, Obstacles to selling BI coverage
Give this one a try later!
- It costs a lot
- uncertainty of what it covers (lack of knowledge)
- not wanting to share financial information
- too technical (complicated rules and coverages)
key advantage of BI
*** think legal
Give this one a try later!
when you have BI coverage you usually do not need to bring about legal
action
Myths of business interruption insurance
1.
Give this one a try later!
1. the broker must be an accountant to understand BI coverage
- many terms sound the same but can mean differently including gross
profits
- gross earnings is a insurance term not accounting
