If there’s a misunderstood coverage in the world of commercial property insurance this may be the one…BUSINESS INCOME INSURANCE. Stay with me over the next few weeks and we’ll get a good handle on this mystifying coverage.
If you don’t feel like a Business income expert, don’t worry. Even as career agents we take refresher classes on business income to continue to understand it.
Topic #1
THE PURPOSE OF BUSINESS INCOME: To repair the profit and loss statement
1. Bus Income pays ongoing operating during a business interruption:
a. Payroll expenses g. Professional fees
b. Property taxes h. Utility expenses
c. Insurance premiums i. Postage & Telephone
d. Temporary rent expenses j. Depreciation expenses
e. Interest expenses k. Franchise fees
f. Advertising expenses l. Maintenance expenses
2. Bus. Income pays for net loss of profit during period of interruption.
3. Bus Income pays extra expenses incurred to minimize the period of interruption.
a. Rental of temporary facilities g. Special advertising expenses
b. Moving to/from temporary facilities h. Cost of additional employees
c. Set up costs at temporary facilities i. Cost of overtime and bonuses
d. Purchase of temporary equipment (less resale) j. Cost to find substitute supplies
e. Utility expenses at temporary facilities k. Cost to find substitute supplies
f. Cost of services performed by others
We’ll add to your understanding of business income over the next few weeks.
Topic #2 Glossary of Business Income Terms.
Topic #3 How much Business Income Limit should I have?
Topic #4 Business Income Worksheets.
Topic #5 Various types of Business Income Insurance.
Topic #6 Consequences of Inadequate limits.
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