Indemnification Endorsement
Coinsurance What Insureds Need to Know
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Without the Extended Period of Indemnification Endorsement, the REM corporation would have been indemnified only for the first six-month period, through the period of repair. With the endorsement, the firm would also be paid for the covered loss occurring during the four-month period following reopening. What's more, the endorsement would provide coverage for the costs incurred to publicize the reopening to customers.
Just how long the period of indemnity should be extended depends on the nature of the individual risk. A period of 90 to 120 days is the recommended minimum, but the characteristics of each individual risk must be weighed carefully. For example, a bowling alley that suffers a fire in July and doesn't reopen until October is likely to lose all of its league business, and therefore substantial revenues, through the next season.
Another attractive feature of the endorsement is that its cost is usually minimal because it doesn't necessarily increase the business interruption limits. This makes the coverage an even better value.
Simply put, the Extended Period of Indemnification Endorsement provides an insured with an otherwise uncollectible reimbursement; that cannot only help a business return to prosperity, but could be decisive to the company's very survival.
Just how long the period of indemnity should be extended depends on the nature of the individual risk. A period of 90 to 120 days is the recommended minimum, but the characteristics of each individual risk must be weighed carefully. For example, a bowling alley that suffers a fire in July and doesn't reopen until October is likely to lose all of its league business, and therefore substantial revenues, through the next season.
Another attractive feature of the endorsement is that its cost is usually minimal because it doesn't necessarily increase the business interruption limits. This makes the coverage an even better value.
Simply put, the Extended Period of Indemnification Endorsement provides an insured with an otherwise uncollectible reimbursement; that cannot only help a business return to prosperity, but could be decisive to the company's very survival.
ADJUSTING TODAY is published as a public service by Adjusters International, Inc. It is provided for general information and is not intended to replace professional insurance, legal and/or financial advice for specific cases.
