HOW SHOULD WAGES BE INSURED?
The only way to provide a company with all the flexibility possible is to insure Wages 100%. If you intend to insure wages fully, you can leave all those items that make up the definition of Payroll, as part of the Sum Insured for Insured Gross Profit. To do this, you do not show Payroll or Wages as an Uninsured Working Expense.
As has been previously stated, total flexibility is only achieved by insuring Wages in full for the entire Indemnity Period.
If Pay-Roll is to be Insured separately using the Dual Wages Method, 100% of Pay-Roll should be shown as an Uninsured Working Expense as Pay-Roll is insured separately as a separate item. By using BICalculator, this will all be done automatically by the system when you select “No” to the question on Pay-Roll Assumptions that reads: “Is full Pay-Roll to be insured as part of Item 1 – Loss of Gross Profit. If you intend insuring 100% of Pay-Roll the Coach recommends you do not split it out but insure it as part of Gross Profit. In such a case you should select “Yes”.
If no is selected Users of BICalcualtor should not deduct Pay-Roll or any part thereof (such as wages or salaries) as an Uninsured Working Expense when calculating Gross Profit on Screen 4.