The Extended Period of Indemnity Endorsement


Indemnity Endorsement (continued from previous page)

...fied 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 endorse- ment would provide coverage for the costs incurred to publicize the reopening to customers.

Just how long the period of indem- nity 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 care- fully. 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 substan- tial 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 uncollect- ible reimbursement; that cannot only help a business return to prosperity, but could be decisive to the company’s very survival.

Adjusting Today Meeting a Need!

Ronald A. Cuccaro, SPPA President and Chief Executive Officer, Adjusters International

When Adjusters International introduced Adjusting Today in the fall of 1989, we promised that it would be a tool designed to help you stay cur- rent in a rapidly changing profession. Your enthusiastic reactions continue to indicate that the newsletter is fulfilling that pledge. I’m pleased to welcome you to this issue of Adjusting Today , which features two more timely and thought-provoking articles.

The first, by Bob Lucurell, FPPA, addresses the crucial subject of coin- surance. Examples of the unfortunate consequences that can result when insureds misunderstand the coinsur- ance principle are all too numerous. Bob explains how they can be avoided through better communication, and offers some specific recommendations on steps the broker can take in leading that process.

Our second article targets the Ex- tended Period of Indemnity Endorse- ment, extremely valuable but often overlooked coverage that can mean the very survival of a company following a major loss.

Bill Rake, SPPA, points out that the time it takes a business to fully recover from a loss can extend signifi- cantly beyond the period required to restore the property itself, and pro- vides insight as to why this endorse- ment deserves attention in formulating a sound business interruption insur- ance program.

And since the language of the ad- justing field differs around the world, we have again included a table of cor- responding terms used in the United States and United Kingdom.

We hope you will enjoy and be stimulated by these discussions and this information. As always, we wel- come your questions, comments and suggestions as to how Adjusting Today can help all of us better serve our industry.


Adjusting worldwide requires an understanding of worldwide terminology. Here are a few com- mon terms used in policy interpretation.

United States United Kingdom

Actual Cash Value Indemnity

Replacement Cost Reinstatement

Business Interruption Consequential Loss

Lost Sales Shortfall in Turnover

General and Admin. Expenses Standing Charges

Expenses to Reduce Loss Increased Cost of Working

Freight Carriage

Coinsurance Average Clause

Expediting Expense Exponse to Reduce Loss

AT90-1R 3002R




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Ronald A. Cuccaro, SPPA


Stephen J. Van Pelt


ADJUSTING TODAY is published as a public service by Adjusters International, Inc. professional loss consultants. It is provided for general information and is not intended to replace professional insurance, legal and/or financial advice for specific cases.