Fire Insurance

Business Interruption – Fix Expenses

Business Interruption Insurance is also called Loss of Income Policy. In the previous Novum (News) we have explained the importance of this unique insurance policy. More accurate with regards to the total sum of annual fix expenses and net profit.

FIX EXPENSES. What do we mean by Fix Expenses in connection to Business Interruption Insurance?

Fix Expenses are as follows:

  • Rent and Leasehold
  • Interest at a bank, mortgage, debentures, and other loans
  • Salary of staff inclusive the social charges
  • Fees of directors and commissioners
  • Pensions and bonuses
  • Depreciations and maintenances
  • Insurance premiums and accountant fees
  • Gas, water and electricity
  • Postage-, telephone- and travel expenses
  • Printing-, advertise-, and commercial expenses
  • Legal support fees and intelligence properties
  • Contributions and subscriptions
  • Variable taxes

To compute the indemnity period we have to observe the Time Logistics Planning and a few factors have to be considered:
Recovery of the turnover

  • Recovery of the production capacity
  • Delivery time of new machines
  • Time of repair of the damage properties
  • The longest (in time) of you will take as the indemnity period

It is advisable to ensure the annual amount of Fix Expenses and net profit. You must really think about the worst-case scenario. Mostly, the indemnity period will be 52 weeks, but in some cases, our Clients insured the indemnity period of 104 weeks.

At least we want to inform you that in cases where the major fluctuations in the turnover, it is possible to increase/decrease the clause with, for instance, 20%. This is to avoid under-/over insurance.

If you want to know more about this phenomenon Business Interruption Insurance, Contact us today!

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