A useful guide to the practical application of business interruption insurance. Suitable for company secretaries, finance directors, accountants/auditors, brokers, loss adjusters and claims officials.
IRM Course Book Module 3.
Author(s): Walmsley, R. M.
Published: 1999
Binding: Hardback
ISBN 10: 1856091740 ISBN 13: 9781856091749
Chapter 1
Risk Management and Business Interruption
Insurance
Possible causes of loss – Identification – Transfer of risk – Insurance–
Local authority councils – Small business – Petrochemicals, Oil and
major manufacturing – Service industries – Disaster recovery plan –
Interruption report
Chapter 2
Utmost Good Faith
Law Commission - Policy condition - Claims
Chapter 3
Negotiating Insurance
Insurance brokers – Survey reports – The interruption report –
The Insured – The business – Machinery – Services – Raw materials –
Employees – Interruption features – Estimated maximum loss
(EML) – Package policies – Specimen interruption report –
Adjusters reports to insurers
Chapter 4
The Policy
Implied conditions – Material damage proviso – Arbitration –
Intention – Contra proferentem – Exclusion clauses – Reasonable care
conditions – Context – Specific words – Consistency – Additional
Clauses – Grammar – External evidence – Rectification – Letters of
intent – Conditions and warranties – Typical insurance warranties –
Condition precedent and condition subsequent
Chapter 5
Insurable Interest
How does insurable interest arise? – Co-insurance – Transfer of
policy – Material damage proviso
Chapter 6
The Schedule
Suppliers - Association of British Insurers extension wordings –
Specified suppliers – Unspecified suppliers – Storage premises –
Property in store – Public utilities – Suppliers of suppliers –
Patterns etc – Transit – Professions – Motor trade –
General Customers – Suppliers to customers – Premium rating –
Prevention of access – Loss of attraction
Chapter 7
Proximate Cause
Onus of proof – Reasonable care – Material damage proviso –
Exceptions and exclusions – Pollution and contamination – Additional
and special perils – Additional perils – Special business interruption
extensions – Proximate damage – Injury to employees
Chapter 8
Sum Insured; Gross Profit; Maximum Indemnity
Period
Gross profit – Analysis of accounts – Overnight cash deposits –
Royalties – Franchises – Semi-variable charges – The sum insured –
Maximum indemnity period – Premium adjustment clauses –
Declaration – Linked basis of cover – Under-insurance – Interruption
reports – Package policies
Chapter 9
Indemnity
The indemnity – Material damage proviso – Consequential loss –
Consequential losses not covered – Possible policy restrictions –
Shortened maximum indemnity period
Chapter 10
Claims Procedure
Statutory declaration – Police and Criminal Evidence Act 1984 – Fraud –
Claim procedure
Chapter 11
The Specification; Clause (a); Turnover; Rate of
Gross Profit.
Standard turnover – Indemnity period – Adjusted standard turnover –
Historical figures – Service industry – Manufacturing industry –
Proximate damage – Special extensions – Other areas of peril – Factors
which result in changes in the adjusted standard turnover – Case
study – Departmental clause – Salvage sale clause – Alternative modes
of production and trading – Alternative trading – Alternative trading
clause – Gross profit – New business clause – Accumulated stocks –
Sale or winding up of the business – Market practice
Chapter 12
The Specification; Clause (b); Increase in Cost of
Working
Additional increase in cost of working
Chapter 13
The Specification; Saving; Under–insurance
Savings – Depreciation – Wages – Savings and uninsured standing
charges – Under–insurance – General
Chapter 14
Contribution and Subrogation
Contribution – Common law – Policy conditions – Rent – Condition
precedent to liability – Subrogation – How do legal liabilities arise –
Procedure – Third parties (fights against insurers) act 1930 – Housing
grants construction and regeneration act 1996 – Co-insurance –
Distribution of money recovered from third parties
Chapter 15
Material Damage Overlap
Valuation of manufacturers stock – Business interruption policy –
Contribution – Summary
Chapter 16
Variations on the Basic Form of Cover
Increase in cost of working only – Documents – Cross revenue – Net
revenue – Advance profits – Joint contracts tribunal standard form of
building contract – Clause 22D – Fines or damages – Book debts –
Research establishment expenditure – Flexible limit of loss cover –
Alternative methods of measurement of loss – Engineering –
Computers – Package Policies – General
Chapter 17
Product Tamper; Latent Defects
Malicious product tamper – kidnap and extortion insurance – Latent
defects – General
Appendix A
Association of British Insurers recommended policy wordings,
extensions and clauses
Appendix B
Specimen wordings for:
Advance profits – JCT; 22D – Book debts – Research establishment
expenditure – Flexible limit of loss – Engineering
