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Frequently Asked Questions

Other Common FAQs

How do you treat depreciation in a claim calculation and when setting Declared Values? Where items are replaced under property cover, would depreciation then be a saving?

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Non-cash expenses such as depreciation and amortisation do not in our view form part of claims calculation. However, this is quite complicated and may be handled differently in different cases. It may depend on the Material Damage claim and whether assets are written off and when they are replaced. We do not recommend that they are treated as an Uninsured Working Expense.

Would Advanced Loss of Profits (ALOP)/ Delay in Start Up (DSU) cover provide cover for additional interest payable to a financier?

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Yes. ALOP/ DSU can cover a wide variety of expenses including loss of gross profit, increased costs etc. as a result of an Insured Incident.

Does a premium adjustment clause allow room to deal with changes in forecast Insurable Gross Profit?

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It does not remove coinsurance but if you over insure then adjust the Policy everyone wins.

Is it not better to over insure and at renewal have the underwriter make a premium adjustment based on actual Insurable Gross Profit in accordance with the adjustment clause under an ISR?

I have had many clients who have utilised this method. What are your thoughts?

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If the Insured’s cash flow allows it is an option and there is no problem in doing so.

It is a great answer to an ongoing problem.

What is your opinion on Instant (weekly) Profits as an alternative Gross Profit Calculation

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The weekly covers vary enormously in Policy Wording and level of cover.

Some Policies of this nature do not cover the Material Damage element of the claim.

We are always concerned where we have a different underwriter on Material Damage and Business Interruption claims as it may lead to inconsistency in Policy decisions. Some of the covers take average weekly amounts as a sum insured and that limits it to those figures. That may be insufficient on a seasonal business.

Some of the covers for AICW, claims preparation can be limited in cover or amounts. It depends upon the Policy and the client’s circumstances.


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