Exam 1 Part G Flashcards
What does Business Income Insurance cover
Pays for a business’s expenses and profits while the business is shut down due to a direct loss
Common Exposures For Business Insurance
“1) Loss of profits
2) Continual expenses such as mortgage, payrool, taxes, etc
3) Extra Expense: additional expenses that the business would not normall have that occurred during the period of recovery”
Requirements for a Business Insurance Loss
“1) Direct damage to property
2) Occurred at described premises
3) Suspension of operations and or incuring extra expenses
4) Proven financial loss”
Business Insurance Terms
”- Insuring Agreement
- Business Income
- Extra Expense”
Business Income for Business Insurance
”- Net income (net profit) that would have been earned
- Continued normal operating expenses (including payroll)”
Why Does Business Income Insurance cover payroll?
Might lose employees if not covered
Why Extra Business Expense?
Provides incentive to return to work quicker
When does Period of Restoration begin?
72 hours after damage occurs
Civil Authority
“Prohibt access to premises due to direct physical loss or damge to a nearby premises
- blocks your access and results in a shutdown”
Waiting Period forBusiness Income in Civil Authority
72 waiting period
Alternations/New Buildings
Opening delayed by a direct loss that is covered
When is Payment made in relation to Alternations/New Buildings
For income lost between when building should have opened and when it did; including extra expense
What is a problem with Alternations/New Buildings?
Difficult to prove
Why Is there a Moral Hazard Issue With Alternations/New Buildings?
“No customers yet
- Different than normal income situation”
Methods of Writing Coverage
”- Maximum Period of Indemnity
- Monthly Limit of Indemnity”
