Payment of Increase cost of working over and above policy Time excess.

There is lot of confusion amongst Insurance officials on following  case study.
If there is MD claim which led to interruption in business and insured incurs additional expenses to continue business operations. Now the question comes whether these additional expenses are payable if interruption period falls within the policy time excess.

For the benefit of all it is clarified that Increased cost of working is very much payable subject to condition that it is within the economic limits and it is higher than the amount equivalent to time excess given in the policy.
For example if by incuring Rs 2 lacs, insured avoids loss of gross profit to the extent of Rs 3 lacs then it would be payable under BI policy. However, if the policy excess of 7 days of standard gross profit is higher than Rs 2 lacs then nothing would be paid. It is further clarified that if 7 days of std gross profit comes to Rs 1.50 lacs then only the balance amount of Rs 50 K would be payable under the policy.

Comments

  1. ymt gangAugust 31, 2020 at 2:45 PM

    Need little more clarification on 7 days policy excess. Why it is in days instead of certain amount.

    ReplyDelete
    Replies
    1. V.P SharmaSeptember 2, 2020 at 1:38 PM

      It is a practice which is followed world wide. BI policy excess is always applied in terms of number of days

      Delete
  2. B.L.MeenaSeptember 3, 2020 at 2:33 PM

    In Consequential Loss Fire Policy, kindly throw some light on jargons like ATS, STO, ICW, ISC
    Trend Clause
    How to fix Sum Insured for LOP?

    ReplyDelete
    Replies
    1. V.P SharmaSeptember 19, 2020 at 7:52 PM

      Please visit video section on my website vpinsupedia.com and check video on business interruption policy part 1 where all these terms have been explained with examples in simple language.

      Delete

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