Visible things are thought of first, but the cash flow related to the operation of a device may sometimes go unnoticed.
The goal of the business interruption insurance is to protect business operations against financial losses and possible additional expenses arising from interruption of work.
The business interruption insurance is related to the corporate property insurance, because interruptions resulting from a loss event are subject to indemnification based on the property insurance risks. Entry into a property insurance contract is the prerequisite for entry into a business interruption insurance contract – both contracts have to have been made with the same insurer.
The sum insured equals the gross profit and/or the amount prescribed for compensation of additional costs. The gross profit means the total amount of the sales profit and alternating wages in the company. The sales profit means the turnover less the operational costs. Upon insuring indemnification of additional expenses, the costs pertaining to interruption of work, which may arise upon quicker restoration of the company's cash flows, are agreed on with the insurer.
The insurance period is usually one year, but contracts also contain the definition 'indemnity period.' The indemnity period means a period of time during which the insurance indemnity is paid. The length of the indemnity period depends on how fast the damaged equipment can be acquired or the building restored and the planned gross profit achieved. Although the length of the liability period is important upon finding the insurance premium amount, it is preferable not to have it shorter than 6 months.
The business interruption insurance is related to the corporate property insurance, because interruptions resulting from a loss event are subject to indemnification based on the property insurance risks. Entry into a property insurance contract is the prerequisite for entry into a business interruption insurance contract – both contracts have to have been made with the same insurer.
The sum insured equals the gross profit and/or the amount prescribed for compensation of additional costs. The gross profit means the total amount of the sales profit and alternating wages in the company. The sales profit means the turnover less the operational costs. Upon insuring indemnification of additional expenses, the costs pertaining to interruption of work, which may arise upon quicker restoration of the company's cash flows, are agreed on with the insurer.
The insurance period is usually one year, but contracts also contain the definition 'indemnity period.' The indemnity period means a period of time during which the insurance indemnity is paid. The length of the indemnity period depends on how fast the damaged equipment can be acquired or the building restored and the planned gross profit achieved. Although the length of the liability period is important upon finding the insurance premium amount, it is preferable not to have it shorter than 6 months.