Can interest on a loan be claimed under a business interruption policy?

Can interest on a loan be claimed under a business interruption policy?

One issue keeps coming up more regularly internally here at LMI than any other and that is loss adjusters refusing outright to consider additional interest being claimed as an Increase or Additional Increase in Cost of Working. I cannot understand why this is an issue as I know of hundreds if not thousands of cases where it has been paid. Yet what is happening is […]

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Books glorious books – LMI Library continues to grow

Books glorious books – LMI Library continues to grow

The LMI Library continues to grow through 3 methods. Purchases we make when we see a newly published book on an insurance or risk management topic; Books that I or the team at LMI publish; and The very generous donations by those in the insurance industry who are looking for a good home for their own collection/library. Over the past week we received two wonderful […]

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Are Interest Costs claimable as an Increased or Additional Increased Cost of Working?

Are Interest Costs claimable as an Increased or Additional Increased Cost of Working?

This is a question often put to me as some loss adjusters and insurers push back when it is claimed. If I start with the actual wording from the Australian Industrial Special Risks policy which is found in many other policies, it reads: “The Insurance under this Item is limited to Loss of Gross Profit due to: (a) Reduction in Turnover; and (b) Increase in […]

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Blog Question: How do you deal with Increased Cost of Working incurred during a Waiting Period (Time Excess)?

Blog Question: How do you deal with Increased Cost of Working incurred during a Waiting Period (Time Excess)?

I received this question which comes up from time to time. Hi Prof. Manning, As we know, the increased cost of working (ICOW) of Business Interruption (BI) insurance, that certain expenses may be incurred following loss or damage to try and maintain business activity, such as renting alternative premises, hiring additional staff and additional advertising. What happens if the interruption is shortened under deductible days […]

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Blog question – Additional Increase in Cost of Working under an ISR

I received this question which I felt was worth sharing. Allan, I have for many years referred to your most excellent publication for guidance relative to BI [Business Interruption] insurance. The guide makes reference to the Industry Mark IV wording and it is in respect of the Mark IV wording that I have an enquiry, where I could not locate any reference to my particular […]

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The major risks facing business in 2018

Business Interruption, cyber attacks, and natural catastrophes are, not surprisingly to us in the industry, the leading business risks this year, according to more than 1,900 risk experts from 80 countries polled for the latest Allianz Risk Barometer. The survey by Allianz Global Corporate and Specialty reveals that cyber attacks and business interruption remain the leading two risks in Australia. What remains disappointing is that […]

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When does the Indemnity Period end?

At LMI Group, we have an issue which comes across, almost in waves, in regards to a number of claims which needs to be addressed before the next flavour of the month adjustment to reduce an Insured’s claim. The one we have just overcome is where the adjuster has made a “notion” adjustment, without explaining the basis for it. Now, we have come across on […]

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Learning from the past to protect against today’s hazards

During the very hot summer of 2008-2009, that included the Black Saturday bush fires, our Melbourne office was left without power due to both the fires and the inadequacy of an electrical sub-station across the road. As it is imperative for us to provide our claims services during periods of natural catastrophe, so we are able to assist people in need we installed a backup […]

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Blog Reader Question: Business Interruption Gross Profit Calculation

I received the following question from a reader and reproduce it and my answer below for you all: Dear Mr Manning, There is something I may be missing in the calculation of Gross Profit under the BI policy. The policy states: “GROSS PROFIT the amount by which: (a)      the sum of the Turnover and the amount of the Closing Stock and Work in Progress shall […]

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Alarming Trends – Part 1: Indemnity Periods

Over the past month or so, I have been inundated with questions regarding moving from reinstatement and replacement conditions to indemnity, in reducing Sums Insured and reducing indemnity periods. Over the next couple of days, I will address each of these and I will start today with Indemnity Periods. Back when I first wrote my blue book on Business Interruption insurance in 2001, I was […]

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