Many Policy Wordings allow for a specific amount of cover automatically for AICW. For others an AICW sub limit needs to be declared.
Yes, it is possible however in general it is not advisable to have AICW only in place for majority of businesses. AICW does not cover the loss of Insurable Gross Profit and payroll. In the event of a partial or total loss, the majority of businesses will not be able to resume operations by simply relocating their office or changing their address and telephone numbers, etc.
If clients won’t take Gross Profit cover, AICW provides some protection but in our view rarely enough.
Service based businesses such as accounting firms, management consultancy organisations, lawyers, etc. may not need to cover their gross profit, as they are able to relocate their offices and resume operations with a minimum disruption to their clients. To recommend this approach to your client, you need to be very confident that you understand their business model and that the client understands the potential exposures which may eventuate from this approach.
For an appropriate AICW amount, MSM recommend start with 5-10% of the Insured Gross Profit amount as a rough guide and then amend for client specific factors.
Any increased cost should be claimed under ICW but it must pass the sole purpose test or economic limit test. If not then part or all goes to AICW.
On a business pack start with $250,000 and work up for size and complexity.
This is obviously a client specific determination and all the facts and circumstances would need to be considered.
Any premises dependent business can suffer a loss of gross profit and it is not advisable to offer AICW only for any online retail business with one major warehouse. However, if the business has multiple warehouses in different locations, an AICW cover only might be adequate.
MSM comprises a multi-disciplined professional team including qualified accountants with over 25 years experience.
Our team has expertise across a diverse range of industries and organisations.