Business Income Loss
Proving an Insured Loss: Policyholders Need Experts Too Insure for this Additional - But Necessary - Expense
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agent or broker's part to make sure their client's policy provides the right protection. To that end, it is essential to understand what the variations are and how such differences can affect the insurance recovery.
Understanding the Intent of the Coverage
In examining the policies and forms of some 20 major property underwriters to see how coverage to reimburse policyholders for loss preparation costs is handled, it was interesting to see that some are quite detailed in their provisions, while others are remarkably brief.
What's more, the length of the endorsement does not necessarily reflect the true breadth of the coverage. And no matter how the extension of coverage is written, questions may still exist as to the exact intent and meaning of the
Understanding the Intent of the Coverage
In examining the policies and forms of some 20 major property underwriters to see how coverage to reimburse policyholders for loss preparation costs is handled, it was interesting to see that some are quite detailed in their provisions, while others are remarkably brief.
What's more, the length of the endorsement does not necessarily reflect the true breadth of the coverage. And no matter how the extension of coverage is written, questions may still exist as to the exact intent and meaning of the
language. To avoid potential conflicts, not to mention disappointment after a loss, before a loss occurs ask the insurer to express the precise intent of the coverage. If possible, negotiate changes and clarifications to fit the insured's particular needs.
Focus on the Needs of the Risk being Insured
As will be seen from the examples discussed in the next pages, a wide variety of clauses are available to cover the claim preparation costs needed to prove or support a property or business income loss. Some are included in the basic policy form or language; others must be added by endorsement.
In covering claim preparation expenses, think first about the specific exposures being protected against and the exact provisions that may be needed. Equally important, consider
Focus on the Needs of the Risk being Insured
As will be seen from the examples discussed in the next pages, a wide variety of clauses are available to cover the claim preparation costs needed to prove or support a property or business income loss. Some are included in the basic policy form or language; others must be added by endorsement.
In covering claim preparation expenses, think first about the specific exposures being protected against and the exact provisions that may be needed. Equally important, consider
the limitations or exclusions that should be avoided. Knowing precisely what to anticipate is key to negotiating and securing the appropriate provisions.
Create Scenarios
The insured who has suffered a serious loss previously will have strong ideas as to the need for the coverage and the type of sources that should be insured for adequate protection—including dollar amounts of insurance. One who has never experienced a devastating loss, however, may face a far different challenge. A good starting point for this insured is to construct a "what if" scenario—projecting the maximum claim preparation expenses that might occur in the event of a loss. Answer such important questions as:
Create Scenarios
The insured who has suffered a serious loss previously will have strong ideas as to the need for the coverage and the type of sources that should be insured for adequate protection—including dollar amounts of insurance. One who has never experienced a devastating loss, however, may face a far different challenge. A good starting point for this insured is to construct a "what if" scenario—projecting the maximum claim preparation expenses that might occur in the event of a loss. Answer such important questions as:
- Are duplicate records available if in-house records are destroyed?
