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* Accounts Receivable Accounts receivable insurance pays for the loss you will have if your business records are are destroyed by an cause insured by your policy – for example a fire loss if you have a a property insurance policy.
The coverage pays for… * Amounts you are due from your customers that you are unable to collect as a direct result of loss or damage to records of accounts receivable.
* Interest charges on any loan to offset the delayed collections.
* Excess collection expense necessary because of such loss or damage.
* Other reasonable expenses you may have as a result of re-establishing records of accounts receivable.
* Actual Cash Value vs. Replacement Cost Coverage Actual Cash Value –also referred to as ACV – is generally the replacement cost minus depreciation. Replacement cost is the full replacement cost without deduction for depreciation on any loss sustained, subject to the terms of the co-insurance clause.
No deduction is taken for depreciation in arriving at the proper amount of insurance needed to comply with the co-insurance clause.
* Basic Property Coverage vs. Special Property Coverage Basic Coverage Under a "basic " contract, the damage or loss must be caused by a peril that is "named" or listed in the contract. Consequently, if damage or loss is caused by a peril that is not named, there is no coverage. In addition, the contract's exclusions must also be considered in determining coverage.
Special Coverage A special or “All Risk” coverage takes the opposite approach. You are covered for any loss that is not specifically listed as excluded.
* Blanket Insurance Coverage Explained Blanket insurance provides a single policy on the insured's property for: * two or more different kinds of property in the same location * same kind of property in two or more locations * two or more different kinds of property in two or more different locations Blanket coverage is ideal for businesses as such chain stores - all of whose property is covered with no specific limit on each particular property regardless of its location. This lets the business shift merchandise from store to store without having to specifically notify the insurance company of each move.
* Business Owners Policy – BOP - Explained Business owners policy is a combination property, liability, and business interruption policy.
It is usually written to cover expenses of small and medium size businesses resulting from damage or destruction of business's property or when actions or non actions of the business's representatives result in bodily injury or property damage to another.
Businesses that qualify under this heading include…
* office buildings three stories or under not to exceed 100,000 square feet * apartment buildings six stories or under not to exceed 60 dwelling units * any other buildings not to exceed 7500 square feet for mercantile space * buildings occupied principally as an apartment, office, or engaging in trade or commerce
Properties that cannot be insured under this policy include banks, condominiums, bars, restaurants, automobiles, recreational vehicles, contractor functions, and manufacturing operations.
* Builders Risk Builders Risk provides coverage for both new structures and additions to existing structures. Construction of any structure always involves a variety of interests * Owner * Lender * General contractors * Subcontractors Each party has an insurable interest in the project until the project is accepted by the owner. The builder’s risk policy provides direct damage protection for each of these parties. Perils insured against are… * Fire * Lightning * Vandalism * Malicious mischief * Riot and civil commotion * Smoke * Sprinkler leakage * Water damage * Windstorm * Hail Builders risk policy limits are normally for the full amount of the construction contract. The completed value form requires a 100% coinsurance because insurance carried must equal the completed value of the structure. The reporting form allows coverage to be carried according to the stage of completion of the structure. The policy may include coverage for building materials in transit and materials stored away from the construction site. It does not provide coverage for the contractor’s own equipment used to erect the project. Broader Form policies will provide protection for damage arising from special causes of loss meaning the risk of direct physical loss, unless the loss is… * Excluded by the exclusions or, * Limited by the limitations of the policy Common exclusions include… * Flood * Earthquake * Collapse
Also know as Earnings Insurance
Business Income provides loss of income coverage for your business by replacing your operating income during the period when damage to the premises or other property prevents income from being earned. A good example would be a fire at your place of business that required time to repair or relocate your operations.
For the purpose of this insurance coverage, "earnings" are defined as the actual loss sustained by the insured as a direct result of business interruption necessitated by damage or destruction of real or personal property. The damage or loss must be caused by the insured perils.
Furthermore, "business income" is defined as the sum of total net profit, payroll expense, taxes, interest, rents, and all other operating expenses earned by the business.
The amount of coverage your Earnings insurance provides is established on the basis of either amount of insurance or actual loss sustained for each 30-day period of necessary business interruption caused by damage or loss from covered perils.
* Care, Custody and Control
Care, custody and control is a phrase used in liability insurance policies to eliminate coverage for damage or destruction to property under the care, custody, and control of an insured.
Coverage for property in your care, custody or control is excluded because the insured either has some ownership interest in the property or is a bailor of the property.
In these situations it is not that you can not insure these exposures, but they are simply more correctly insured separately under other forms. Property that you have an ownership interest in is normally insured through a property insurance policy. Property you are a bailor for is normally insured through a bailee policy.
* Co-Insurance Explained A property insurance policy may contain a "co-insurance" clause.
Co-insurance is an arrangement by which the insured, in consideration of a reduced rate, agrees to carry an amount of insurance equal to a percentage of the total value of the property insured.
Generally, the co-insurance clause, which is expressed as a percentage (80 percent is common), will be triggered when the policy limit for the insurance is less than the fair market value of the property multiplied by the co-insurance percentage.
The following equation is used to determine what amount may be collected for partial loss:
Fair Market Value x Co-insurance percentage = Amount of insurance required.
Compare the amount of insurance actually carried to the amount from the above calculation.
If the amount actually carried is equal to or greater than the amount in the calculation, the full loss less any deductible amount should be paid.
If the amount of insurance actually carried is less than the amount from the calculation, the amount of the loss paid, less applicable deductible, will be the percentage of the actual amount carried as relates to the amount which should have been carried.
* Deductibles Explained
Many insurance coverages are written with a deductible
A deductible is the amount of loss the insured pays in a claim before the insurance company makes any payment. The purpose of a deductible is to discourage small claims that the insured can manage as a normal cost of doing business.
The larger the deductible an insured accepts, the lower the premium charge.
* Earthquake
The Earthquake endorsement extends your policy to include damage that results directly from an earthquake. Under many policy definitions, all earthquake shocks that occur within a 168 hour period (one one week) are considered to be a single occurrence.
* Extra Expense Extra expense insurance pays for cost you will have as a result efforts to operate a business that that is damaged by an insured insured peril - such as fire. For example, it can be necessary to rent other space to continue your business operations. In this this example you would have many extra expenses, rent, installation of telephones, etc. Extra Extra Expense insurance covers these expenditures over and above your normal monthly expenses * Flood For insurance purposes, flood is defined as…“A general and temporary condition of of partial or complete inundation of normally dry land areas from... * overflow of inland or tidal waters * the unusual accumulation and runoff of surface waters from any source * abnormal, flood-related erosion and undermining of shorelines” Flood also means inundation from mud flows caused by accumulations of water on or under the the ground as long as the mud flow, and not a landslide, is the cause of loss. * Glass Coverages Explained Glass insurance provides additional, "special" protection for specifically listed plate glass, except for the perils of war, nuclear reaction, and fire. (Fire is covered under the building policy.) This coverage is for full replacement cost and covers the expense of repairing frames, installing installing temporary plates, or boarding up openings. |
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* Inflation Guard Inflation can cause the value of property to change substantially over the period of your policy. Inflation guard coverage defines scheduled increases in the policy limit during the the policy term. You select the percentage for these increases.
* Inland Marine Coverage Explained Inland marine insurance (transportation insurance) provides coverage for damage or or destruction of an insured's property and liability exposure of an insured for damage damage or destruction of someone else's property under his or her care, custody, or or control. Inland marine policies became known as "floaters" since the property to which coverage was originally extended was essentially "floating."
Inland Marine has a very wide number of forms.
1. Appliance Dealers Floater 39. Irrigation Equipment Breakdown 2. Aquaculture Coverage 40. Jewelers Block Policy 3. Bailees Customers Goods Floater 41. Landscapers Equipment Floater 4. Bees & Beekeepers Equipment Coverage 42. Livestock Floater 5. Bicycle Floater 43. Marine Mobile Equipment Coverage 6. Boat Dealers Physical Damage 44. Marine Transportation Coverage (Excess) 7. Broadcasters Property Floater 45. Miscellaneous Property Floater 8. Cable TV Broadcasters Floater 46. Mobile Agricultural Equipment Floater 9. Camera Floater 47. Mobile Radio Equipment Coverage 10. Camera/Musical Instrument Dealers Policy 48. Morticians Floater 11. Carnival Equipment Coverage 49. Motor Truck Cargo 12. Checkroom/Storage Liability 50. Movers Equipment 13. Cold Storage Locker Floater 51. Moving and Storage Cargo 14. Corpse Floater 52. Musical Instrument 15. Customers Goods Legal Liability 53. Negative Film Floater 16. Customers Property in Storage 54. Nursery Floater 17. Dealers Policy 55. Ocean Marine Cargo 18. Deferred Payment Inventory Policy 56. Physicians and Surgeons Floater 19. Dies, Patterns and Molds Floater 57. Poultry Coverage 20. Drilling Rig Floater 58. Precious Commodities Coverage 21. Dry Cleaners Bailees Form 59. Processing Floater 22. Dumpster Coverage 60. Product Spoilage Coverage 23. Employees Tools Coverage 61. Radium Floater 24. Equipment Dealers Floater 62. Rental/Leased Property Floater 25. Exhibition Floater 63. Rigger's Liability 26. Film Floater 64. Salesmen’s Samples Floater 27. Fine Arts Dealers Floater 65. Scientific Instrument Floater 28. Fine Arts/Antiques Floater 66. Ship Repairers Legal Liability 29. Fire Department Equipment Floater 67. Sign Floater 30. Floor Plan Merchandise 68. Telecommunication Equipment Floater 31. Fraudulent Delivery 69. Theatrical Equipment Floater 32. Furriers Block Policy 70. Tools and Equipment Floater 33. Furriers Customers Policy 71. Transportation Floater 34. Furriers Excess Legal Liability 72. Trip Transit Coverage 35. Garment Contractors Floater 73. Vending Machine Coverage 36. Implement Dealers Floater 74. Warehousemen's Legal Liability 37. Installation Floater 75. Wharfingers Liability 38. Installment Sales Floater 76. Winter Range Livestock Floater
* Replacement Cost Coverage Explained Replacement cost insurance provides coverage on the basis of full replacement cost without deduction for depreciation on any loss sustained, subject to the terms of the co- insurance clause.
This coverage can apply to both building and contents items as specified on the face of the policy.
No deduction is taken for depreciation in arriving at the proper amount of insurance needed to comply with the co-insurance clause.
* Sign Coverage Explained Sign coverage is generally provided as an endorsement to a business property floater floater policy.
It covers neon signs for all perils, both while they are being moved and once they are in place.
Signs that are attached to a building can be covered under the underlying property insurance.
The sign floater policy provides broader coverage for each sign that is listed on the policy.
* Spoilage Spoilage insurance provides coverage for spoilage of perishable stock under a specific specific limit. Power disruption can be selected as a covered peril for spoilage losses.
* Valuable Papers Coverage Explained Valuable papers (records) insurance provides coverage in the event that papers of intrinsic value are damaged or destroyed.
Coverage is on an all risks basis that covers the cost of research to reconstruct damaged records, as well as the cost of new paper and transcription.
The term "valuable papers" refers to written, printed, or otherwise inscribed documents and records, including books, maps, films, drawings, abstracts, deeds, mortgages, and manuscripts.
Limits of coverage can be quite high; but the insurance company will not pay an amount in excess of the actual cash value of the loss, or the amount necessary to repair or replace the damaged or destroyed papers. Also, the papers must be kept under lock and key.
* Valuation There are several valuation methods that may be used to determine the amount of your your loss your insurance company will pay. The most common valuation methods are… * Actual cash value * Replacement cost Replacement cost minus depreciation
* Value Reporting The Value Reporting form allows limits of insurance to be high enough to contain the the highest anticipated personal property values while allowing the insured to pay a a deposit premium at the policy inception. By paying only a deposit premium you have to submit periodic reports showing 100% of actual property values to the insurer at predetermined intervals.
The report of values and locations will have to be sent to the company within 30 days of the end of the reporting period.
Locations covered under the Value Reporting form are…
1. Reported Locations 2. Acquired Locations 3. Incidental Locations |
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