Increase In Cost Of Working

An Industrial Special Risks policy requires the Insured to take all reasonable actions to minimise the extent of loss.

A typical Industrial Special Risks policy might contain three separate covers for Increased Costs.

The first is part of the Gross Profit cover and responds to extra costs which are necessary, reasonable and incurred for the sole purpose of minimising a Reduction in Turnover. The extra costs claimed cannot exceed the Gross Profit saved i.e. the economic limit.

A similar cover is available under the payroll section of the wording providing a second item under which extra costs can be claimed.

The third item of cover is known as Additional Increase in Cost of Working. This is a broader cover which responds to extra costs beyond the economic limit and which may be covered to maintain normal business operations.

Extra costs should be claimed under the appropriate heading to ensure the policy responds correctly.

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Author

Published with permission of Claim Solutions Pty Ltd.

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Insurance Policy

Country: - Australia

Policy Description: - Mark IV Industrial Special Risks Policy recommended by the National Insurance Brokers Association.

Insurer: - Various.

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