In this situation, full insurance of Wages is arranged for the entire Indemnity Period. That is, it is fully included under the Gross Profit item.
The benefits are that in the event of a loss, one of the biggest, if not the biggest, ongoing expenses to the business is fully insured. It allows management to use labour to reduce the period of disruption and eliminates the time spent in re-recruiting and training.
As an Insurance Broker, Agent or Insurer’s Representative, you are only offering your client full protection when Wages are fully insured. In addition, you are increasing your commission, while at the same time lowering your professional indemnity exposure. One final tip is that if Wages are to be fully insured, leave it as part of Gross Profit to avoid an item forming part of the policy definition of Payroll or Wages, being omitted.
The only way to provide a company with all the flexibility possible is to insure Wages 100%. It can be left as part of the Insured Gross Profit Sum Insured. You as insurance broker, adviser or agent should be able to provide detailed advice to your client.
When considering what is best for you, keep in mind that no one remembers the price when the loss happens; everyone just wants the Rolls-Royce cover. With wages fully insured you are well on your way to having the premium cover.