Study 7 – Extra Expense Insurance 5/9/2018 C40 – Business Interruption Insurance Study 7 – Extra Expense Insurance

Study 7 – Extra Expense Insurance 5/9/2018 Study 7 – Extra Expense Insurance Explain why some businesses need extra expense insurance Define the terms shown in the Definitions section Distinguish each clause in an Extra Expense form Comment briefly on the rating of the Extra Expense form Describe how an amount of insurance should be chosen under an Extra Expense form Describe how losses are settled under an Extra Expense form

5/9/2018 Introduction

The Need for Extra Expense Insurance 5/9/2018 The Need for Extra Expense Insurance Some businesses must avoid shutdown Alternatives should be arranged Steps to resume operations elsewhere Expenses may exceed income Many classes of risk have this need Not four forms but two

Extra Expense (Named Perils) (IBC Form 4110A) 5/9/2018 Extra Expense (Named Perils) (IBC Form 4110A)

Definitions The business of the insured. 5/9/2018 Definitions The business of the insured. Specified in the Declarations page.

Definitions Direct physical loss of or damage to property. 5/9/2018 Definitions Direct physical loss of or damage to property. At the insured premises. From a Peril insured.

Definitions Means the Declarations Page applicable to this form. 5/9/2018 Definitions Means the Declarations Page applicable to this form.

5/9/2018 Definitions The excess of the total cost during the indemnity period for the purpose of continuing the insured’s business over and above the total cost that would normally have been incurred.

5/9/2018 Definitions The period beginning with the occurrence of the “Damage” and ending not later than such length of time, not exceeding 12 calendar months.

5/9/2018 Definitions Means 30 consecutive days.

5/9/2018 Definitions The condition which would have existed had no loss occurred.

5/9/2018 Definitions The entire area within the property lines and areas under adjoining sidewalks and driveways. At the location described on the Declarations Page.

5/9/2018 Indemnity Agreement In the event that the “Business” shall be interrupted as a direct result of “Damage”, the Insurer shall pay to the Insured the necessary “Extra Expenses” incurred by the Insured during the “Indemnity Period” in order to continue as nearly as practicable the normal conduct of the “Business”, in accordance with the terms and conditions of this Form.

5/9/2018

5/9/2018

5/9/2018 Perils Insured

Exclusions – First Group 5/9/2018 Exclusions – First Group

Exclusions – Second Group 5/9/2018 Exclusions – Second Group

Clauses Interruption by Civil Authority Permission 5/9/2018 Clauses Interruption by Civil Authority Permission Breach of Conditions Reinstatement Subrogation Property Protection Systems

Extra Expense (Broad Form) (IBC Form 4110B) 5/9/2018 Extra Expense (Broad Form) (IBC Form 4110B)

5/9/2018 Named Perils Provides coverage on losses incurred from hazards or events named on the policy

Exclusions – First Group 5/9/2018 Exclusions – First Group

Exclusions – Second Group – Part I 5/9/2018 Exclusions – Second Group – Part I

Exclusions – Second Group – Part II 5/9/2018 Exclusions – Second Group – Part II

5/9/2018 Rating

Choosing an Amount of Insurance 5/9/2018 Choosing an Amount of Insurance

5/9/2018 Loss Settlement

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