Glossary

Business Interruption Please use the alphabetical links below to quickly jump to a glossary entry. A   B   C   D   E   F   G   H   I   J   K   L   M   N   O   P   Q   R   S   T   U   V   W   X   Y   Z

A

Alternative Trading Clause
If during the indemnity period following a loss, goods are sold (or services rendered from) an alternative premises to those defined in the policy schedule, the money generated from this will be taken into account in calculating the reduction in turnover during the Indemnity Period.

Auditors / Professional Accountants Clause
The policy cover will include reasonable charges payable by the Insured to their professional accountants to produce particulars/details contained in the Insureds’ books of account or other business books/documents which may be required for the purpose of investigating/verifying a claim, if at the time they are regularly acting as professional accountants to the Insured.

D

Declaration Linked Basis
The premium is calculated using an estimated figure for Gross Profit/Revenue for the forthcoming period. In order to allow for an element of deviation, Insurers allow a 33.1/3% uplift to this figure. The premium is then adjusted at year end on the actual Gross Profit/Revenue achieved.

Denial of Access
The policy extends to include loss resulting from, interruption to the business caused by, damage to property in the vicinity of the premises (as described in the schedule) which prevents/ hinders the Insured from gaining access to their premises.

Departmental Clause
If the business is conducted in separate departments, the independent trading results of which are ascertainable the policy cover provided by the items of (a) reduction in turnover and (b) increased cost of working shall apply separately to each department.

Depreciation of Undamaged Stock
If it becomes necessary to sell of undamaged stock, below usual price, in order to carry out repairs at the premises, this endorsement provides cover for the loss of profit resulting from such a sale.

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I

Increased Cost of Working
Reasonable additional expenditure incurred in order to minimise interruption to the business. Insurers will essentially consider payment up to the economic limit. e.g. they will allow expenditure of £1 to save £1.

Indemnity Period
The policy will pay from the date of the loss for a specified period thereafter.

Infectious Disease/Notifiable Diseases
This extends the term damage to include the occurrence of a notifiable disease, on the premises or within a specified vicinity of the premises or attributable to goods supplied from the premises, vermin, defective drains, murder or suicide, which prevents you from carrying out your business at the premises.

Intergroup Dependency

L

Loss of Attraction
The policy extends to include loss resulting from (interruption to the Insured’s business) damage in the vicinity which reduces turnover which would have been expected to be recovered if the damage had not occurred.

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P

Payment on Account Clause
In the event of a business interruption loss, payments on account may be made to the Insured monthly during the Indemnity Period, if desired.

Property/Material Damage Proviso Wavier
It is not a condition precedent to liability under the Business Interruption section of the policy for payment to have been made (or liability admitted) under a Property Damage policy for the damage which caused the business interruption, provided this is purely because the property damage loss fell below a specified deductible.

Public Utilities Extension

Either

The policy extends to include business interruption losses resulting from damage (by an insured peril) occurring at the premises of the Public Supply Authority (Electricity, Gas or Water) or damage to the lines/ cables/pipes conveying the supply to the Insured’s premises.

Or

The wider version of cover is to cover “failure to arrive”. The precise cause of the failure needs not be known. It would include accidental severance of pipe / cable.

In neither case is “deliberate act of the Supply Authority” covered unless for the purposes of safeguarding life and/or protecting the public supply undertaking’s system.

S

Specified Customers/Suppliers
This clause provides cover for a downturn in turnover following damage by an insured peril at the premises of a customer or supplier, whom they are dependent for turnover, up to the amount specified.

Stock Accumulation Clause
In calculating any business interruption loss, account is taken and an equitable allowance made if any shortage in turnover resulting from the damage is postponed by reason of the turnover being temporarily maintained from accumulated stocks.

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