INSURANCE COVERAGE
The insurance policy shows that the following cover has been put in place.
Policy Limit……………………………..$510,000 any one loss
Indemnity Period…………………….. 12 months
Declared Value on Gross Profit……. $450,000
Uninsured Working Expenses………Chemicals, gas, supplies, Agents’ fee, direct freight and direct selling costs
Average……………………………….. 100%
The following added features (Additional Benefits) have also been arranged:
Additional Increased Cost of Working………………… $50,000
Claims Preparation Fees………………………………… $20,000
The business is back into full production with no further disruption to either sales or production on 1 July 2007. This means that the business sustained a disruption for only 3 months. With this information, we will now calculate the loss claimable under the insurance policy.
Before we start, however, it must again be stressed that each policy is different, and this is particularly so with Business Pack policies. Therefore, it is imperative that you read the actual wording of the policy you are considering taking out, selling, or calculating a claim under. In this case, we are using the Insurance Council of Australia’s Industrial Special Risks (ISR) Mark IV wording.