HOW A CLAIM IS CALCULATED
Arguably the best way to learn how a claim is settled under the policy is to run through a claim scenario and see just how a business interruption policy responds. By taking this approach you will learn why you insure the way you do and the importance of getting the sum insured/declared value right.
There are a myriad of insurance products out in the Australian market but with some notable exceptions those that insure annual Gross Profit or Gross Income tend to follow the traditional formula when it comes to a claim settlement.
For the sake of this explanation, we have used the Mark IV Industrial Special Risks policy as our policy wording.