Introduction to BI

The Basics of BI

The basic principles of BI insurance and claims are simple.  They are described here in a user-friendly manner by illustrating from an abbreviated financial statement, how an interruption affects the operating profit and how a BI policy provides an indemnity for the loss.

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Which Interruptions are Insured?

Not all business interruptions are insured.  The contractual clauses of the policy are described in this article to explain the extent of cover and its limits, with illustrations from several current policies of NZ insurers.

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How Much Will the Policy Pay?

The BI policy specifies how a claim is to be calculated.  The basic coverage is provided by the Gross Profit Item, which is described in detail in this module.

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Gross Profit as a Policy Item and its Sum Insured

Confusion has arisen from the use of the term "Gross Profit" to describe the basic  BI policy item.  This module describes how the item should be specified and how the sum insured should be calculated. 

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Increased Costs and Savings

Increased costs are an automatic element of the Gross Profit Item but the coverage is very specific and not unlimited.  Savings in insured expenses are deducted from the claim.

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