Business Interruption Insurance
In addition to property insurance, we can provide insurance protection in the event of losses from an interruption in production (economic activity). Damage to the property of the enterprise as a result of a fire, water supply system failure, natural disasters, robbery, etc., can be so serious that it will cause the production capacity to stop, the entire production process. As a result, there will be additional losses:
- The profit previously planned will not be received;
- Despite the simple, the company will maintain the current costs, which it will bear regardless of the state in which the production is.
Loss from Business Interruption (economic activity interruption) is computed based on:
1. Current expenses for continuation of the insured economic activity during the period of its interruption.
Current expenses related to the continuation of economic activity are such expenses that the Customer inevitably continues to bear during the period of its interruption so that after restoration of property damaged or destroyed, in the shortest possible time, resume the interrupted economic activity in the amount existing immediately before it was inflicted Damage that caused a break in production (economic activity). Such expenses may include:
- Wages of workers and employees;
- Payments to social insurance agencies and similar payments;
- Payment for the lease of premises, equipment or other property leased by the Client for their economic activities, if the lease payments are subject to payment by the lessee under the terms of the lease, lease or other similar agreements, regardless of the fact of damage or loss of the leased property;
- Taxes and fees for which the taxable base is calculated regardless of the results of the economic activity of the enterprise;
- Interest on loans or other raised funds, if these funds were attracted for investments in the area of insured economic activity that was interrupted due to material damage;
- Depreciation deductions.
2. Loss of profit out of economic activity as a result of its interruption.
Loss of profit out of insured economic activity is the profit which the Client could obtain during period of economic activity interruption, if it would not be interrupted by occurrence of material harm, including:
- manufacturing enterprises – owing to output or sale of production;
- service enterprises - owing to services rendering;
- Trade enterprises - from sale of goods;
- Owners of buildings and / or constructions – owing to rental payment;
- Insurance coverage can be provided separately only in relation to current expenses for continuation of insurance economic activity by special agreement of the parties.
Period of indemnification:
Client chooses by himself a period of time, for which possible losses form business interruptions of a company are compensated. It depends on the period for which the client, upon his assessments, can restore the property and launch manufacturing. Maximal period of liability can be established within 1 to 36 month by agreement of the parties.