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Frequently Asked Questions

Uninsured Working Expenses


Are there circumstances where you would note Uninsured Working Expenses for “total loss only” cover?

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No. You can’t assume what will occur and you can’t have two Sum Insured or two Declared Values on one Policy i.e. one for a total loss and one for a partial loss.

If purchases are always variable, why doesn’t the Steadfast Business Pack Insurable Gross Profit definition automatically exclude them?

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They are generally variable – sometimes they can be fixed on take and pay contracts in the agricultural and mining industries.

Most Insurers wording list purchases as an UWE on Business Packs – some include freight and packaging. You need to check the specific wording on each.

What do you suggest can be done about the confusion around Uninsured Working Expenses to ensure we get the Sum Insured right?

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As a start we suggest you provide definition of Uninsured Working Expenses and examples to your client. You need to work with the client on getting this right. The MSM Helpline is also a source of assistance and we are generally to discuss your client’s situation and give you some preliminary views as part of this service.

What happens if I don’t include the listing of uninsured working expenses on the schedule? Sometimes I see a simple description clause instead used on the Policy Schedule.

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In the event of a claim the Uninsured Working Expenses will need to be determined.

To avoid any dispute between the Insured/claims preparer and loss adjuster/Insurer, it is necessary to identify UWEs at the Policy inception. A failure to list them may end up disadvantaging the Insured through under-insurance and a prolonging of the claim process.

In order to appropriately determine the Sum Insured (Declared Value) for the Insured Gross Profit, UWEs need to be considered so we recommend getting it right as part of this process.

Why is it necessary to declare Uninsured Working Expenses (UWEs) on the Policy Schedule?

Why isn’t it acceptable to note on the Policy Schedule that UWEs are those expenses that cease or reduce in proportion to turnover and when a claim is submitted those expenses that are UWEs can be determined for the purposes of calculating the claim.

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The Policy Wording normally states the UWE’s must be listed.

To avoid any dispute between the Insured/claims preparer and loss adjuster/Insurer, it is necessary to identify UWEs at the Policy inception. A failure to list them may end up disadvantaging the Insured through under-insurance and a prolonging of the claim process.

In order to appropriately determine the Sum Insured (Declared Value) for the Insured Gross Profit, UWEs need to be considered so we recommend getting it right as part of this process.

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