Blog Question: Is There any Difference Between These Two Additional Increase in Cost of Working Clauses?
Hi Allan I have 2 wordings I am trying to compare :
Item 3. Increased Cost of Working.
The Cost of further expenditure not otherwise payable under this Section, necessarily and reasonably incurred during the Indemnity Period in consequence of the Damage, for the sole purpose of avoiding or minimising a reduction in Gross Income or resuming or maintaining the normal operation of the Business.
2. Additional increase in cost of working
the increase in cost of working (not otherwise recoverable under this Policy) necessarily and reasonably incurred during the Indemnity Period as a result of the Damage for the purpose of avoiding or diminishing reduction in Gross Revenue and/or resuming and/or maintaining normal Business operations and/or services.
Paul [surname and email address provided]
In this case, while the two wordings have different headings, in that CGU call the optional coverage Increase in Cost of Working, while Allianz add the word Additional in front of it; the intention and extent of coverage is, to my way of thinking, exactly the same.
While Allianz use the term Additional Increase in Cost of Working in the heading, the word does not in fact appear in the wording of the coverage provided. This is exactly the same in the Industrial Special Risks policies.
Another difference that does not really effect cover is that the CGU wording includes the words ‘sole purpose’ as part of the criteria for being able to claim under the benefit. These words are typically found as one of five tests under a traditional Increase in Cost of Working cover, as found under an ISR policy. While this is not an issue here, the wording goes on to say that they expenditure can be claimed if it is for ‘ resuming or maintaining the normal operation of the Business.’
The important thing to keep in mind is that the word before these in both clauses is ‘or’ not ‘and’. As such, as long as the expenditure under either policy is reasonable and incurred by the Insured to resume or maintain the normal operation of the Business, it is claimable. I can see no difference in coverage under either wording.
I hope this helps.