Risk context
Material damage and business interruption are written together for a reason: the damage section rebuilds the asset, the interruption section addresses the trading period while it is rebuilt.
Underinsurance in this class is usually arithmetic rather than judgement, with declared values or indemnity periods set years ago and never revisited.
Concepts that appear in this class
- Declared values
- Reinstatement values for buildings, plant and stock. Average conditions can reduce a settlement if these are understated.
- Indemnity period
- The maximum period the interruption section responds for. It should reflect realistic reinstatement time, not the accounting year.
- Gross profit basis
- Insurance gross profit is defined in the policy and differs from the accounting definition.
- Protections and conditions
- Alarm, sprinkler and hot-work conditions are typically written as requirements that must be maintained.
These are general descriptions of terms commonly used in this class of insurance. They do not describe your policy. Whether any of them apply, and on what terms, is determined by the wording, schedule and endorsements issued to you.
What moves the terms
- 01Construction, occupancy and adjacent trades at each location
- 02Flood zone and historic loss experience
- 03Stock peaks and seasonal variation
- 04Reinstatement lead times for specialist plant