Term
| Business income insurance |
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Definition
| Insurance that covers the reduction in an organization's income, when operations are interrupted by damage to property caused by a covered peril. (p. 4.4) |
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Term
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Definition
| The difference between revenues (such as money received for goods or services) and expenses (such as money paid for merchandise, rent, and insurance). (p. 4.4) |
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Term
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Definition
| Net income that results when revenues exceed expenses. (p. 4.4) |
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Term
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Definition
| Net income that results when expenses exceed revenues. (p. 4.4) |
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Term
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Definition
| Expenses that continue to be incurred during a business interruption. (p. 4.5) |
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Term
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Definition
| Expenses that will not continue during a business interruption. (p. 4.5) |
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Term
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Definition
| Expenses, in addition to ordinary expenses, that an organization incurs to mitigate the effects of a business interruption (p. 4.5) |
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Term
| Business Income (and Extra Expense) Coverage Form |
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Definition
| Form that covers both business income and extra expense losses (even if the extra expenses do not reduce the business income loss). (p. 4.7) |
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Term
| Business Income (Without Extra Expense) Coverage Form |
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Definition
| Form that covers business income loss but covers extra expenses only to the extent that they reduce the business income loss. (p. 4.7) |
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Term
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Definition
| Sum of (1) net profit or loss that would have been earned or incurred if the suspension had not occurred and (2) normal operating expenses, including payroll, that continue during the suspension. (p. 4.8) |
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Term
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Definition
| The period during which business income loss is covered under the BlC forms; it begins seventy-two hours after the physical loss occurs and ends when the property is (or should have been) restored to use with reasonable speed. (With regard to extra expense coverage, it begins immediately after the physical loss occurs.) (p. 4.8) |
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Term
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Definition
| Coverage for necessary expenses incurred by the named insured to reduce business income loss; the expenses are covered only to the extent they actually reduce the business income loss. (p. 4.10) |
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Term
| Civil Authority additional coverage |
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Definition
| Coverage for loss of business income that results when access to the insured's premises is prohibited by civil authority because of damage to property other than the insured's. (pp. 4.10-4.11) |
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Term
| Extended Business Income (EBI) additional coverage |
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Definition
| Coverage for business income losses that continue after the period of restoration ends; the coverage begins when the damaged property has been restored and ends when the insured's business returns to normal, subject to a maximum of thirty days. (p. 4.11) |
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Term
| Probable maximum loss (PML) |
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Definition
| The largest loss that aninsured is likely to sustain (p. 4.18) |
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Term
| Maximum Period of Indemnity coverage option |
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Definition
| Option that deletes the coinsurance clause while limiting loss payment to the lesser of (1) the amount of loss sustained during the 120 days following the beginning of the period of restoration or (2) the policy limit. (p. 4.20) |
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Term
| Monthly Limit of Indemnity coverage option |
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Definition
| Option that deletes the coinsurance clause while limiting the amount recoverable during any month of business interruption to a stipulated fraction (1/6, 1/4, or 1/3) of the insurance amount. (p. 4.20) |
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Term
| Business Income Agreed Value coverage option |
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Definition
| Option that suspends the coinsurance clause as long as the insured carries an amount of business income insurance that is equal to the value agreed on by the policyholder and the insurer. (p. 4.21) |
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Term
| Extended Period of Indemnity coverage option |
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Definition
| Option that extends the duration of EBI coverage to include business income losses that continue for more than thirty days after the property is restored. (p. 4.22) |
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Term
| Extra Expense Coverage Form |
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Definition
| Form that covers extra expenses only. (p. 4.22) |
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Term
| Dependent property exposure |
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Definition
| The possibility of incurring business income loss because of physical loss occurring on the premises of an organization that the insured depends on for materials, products, or sales. (p. 4.23) |
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Term
| Ordinary Payroll Limitation or Exclusion endorsement |
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Definition
| Endorsement that limits coverage for ordinary payroll expenses to a specified number of days or excludes such expenses altogether, allowing the insured to satisfy the coinsurance requirement with a lower amount of insurance. (p. 4.24) |
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Term
| Power, Heat and Refrigeration Deduction endorsement |
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Definition
| Endorsement that eliminates power, heat, and refrigeration expenses from coverage and from the coinsurance calculation, allowing the insured to satisfy the coinsurance requirement with a lower limit of insurance. (p. 4.24) |
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Term
| Ordinance or Law-Increased Period of Restoration endorsement |
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Definition
| Endorsement that covers business income loss during the additional time required to comply with building ordinances or laws. (p. 4.25) |
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