Business Interruption Insurance

Business Interruption Insurance

Business Interruption Insurance policy pays for loss of earnings. When operations are curtailed or suspended because of property loss due to an insured peril under a fire policy. This is also known as consequential loss (or Loss of Profit) Insurance. A financial plan of action expressed in monetary terms that cover a specified time period. Budget Variance difference between actual results and budgeted results.

Cattle or Live Stock Insurance.

This insurance provides protection to the insured person owning cattle namely cows. Oxen, goats, buffalo, etc. In the event of death caused by natural. Accidental means namely electrocution or lightning. diseases etc. or injury and/or disability of the cattle.

Catastrophe Excess of Loss (Cat XOL) Reinsurance Treaty

This type of reinsurance arrangement is especially suitable for losses arising from natural calamities or Acts of God namely. (a) Earthquake. (b) Flood. (c) Storm,(d) Tsunami, etc. where the loss can be widespread and extensive. In nature the magnitude of the loss is enormous.

Insurance House

It is a type of insurance house formed or established usually by a very large. Business Interruption Insurance firm or conglomerate (Not belonging to the insurance sector) to deal. Its own insurance requirements (in-house insurance business). However, some captive insurance companies can acquire licenses or permission to transact insurance business in the private sector.

Casualty Insurance

This type of insurance primarily deals with the liability aspect of cover . Which means legal liability or liability at the court of law of the insured towards a third party (TP) arising out of his/her negligence, error, etc. causing death and/or injury or loss and/or damage to third party property.

However, Terms used for statistical recording purposes to refer to a single incident or a series of closely related incidents causing severe damage to property due to namely (1) Strom and Cyclone (2) Earthquake (3) Tsunami, etc.A person or an organization who can only represent an insurance company with whom it enters into a written contract. According to the contract condition, it cannot represent any other insurance company in the market.

Cash Value (Cash Surrender Value)

The amount available in cash upon surrender of a permanent life insurance policy before it becomes payable upon death or maturity.The insurance company or the one who agrees to pay the losses.

It is a process whereby the primary or original insurer having accepted a risk transfers a part or whole of the risk to another insurance company or company known as reinsurer (s). Cession means the purchase of a part or whole of the risk by re-insurer (s) from the primary or original insurer. A statement issued to individuals insured under a group policy sets forth essential provisions of their coverage.

However, This term is usually used in the case of marine cargo insurance. It includes the cost of goods, insurance, and freight charges.


A person or a party who can legally claim under a Business Interruption Insurance policy in the event of loss, damage, or destruction of the property. Financial loss arising due to the operation of a peril covered under an insurance contract. So, the event of a valid claim under an insurance policy, the insured along with other supporting documentation submits a bill with detailed calculations of the loss.

He/she intends to claim from the insurance company. In insurance, someone who has suffered a financial loss asserts a legal right to be indemnified or compensated for that loss.

Claims Co-Operation Clause

Claims co-operation clause which forms part of co-insurance and reinsurance contract. This clause states that in the event of a claim under the policy but, the primary insurer shall be responsible for handling all claims matters namely(1) Appointment of a survey/loss adjuster, (2) Negotiating settlement of the claim, and (3) Settlement of claims, etc.


So, According to this clause co-insurer(s) and re-insurer(s) have an obligation to fully cooperate with the primary insurer in matters described above and the primary insurer’s decision shall be final and binding upon them. A type of liability policy that covers claims which occur and are reported while the policy is in effect, regardless of when the wrongful act took place.

Class Selection

Where a select group is taken from a population consisting of a mixture, of different types (classes) of individuals with different characteristics. Claims Control Clause Reinsured has to follow the claims control clause within 14 days of the loss event, a notice but, of claim is to be given to all the reinsurers. Reinsured has to cooperate with reinsurers’ representatives for investigations and assessments of claims.

Reinsured should not admit liability or make payments without prior approval by reinsurers. Reinsurers have the right to appoint los but, adjusters to control claims. The reinsured may carry on steps to control claims, in normal ways to handle claims.

Claims Expenses

So, the claimant undertakes litigation in respect of a claim the legal expenses, court fees, lawyer’s fees, etc. are incurred. FBC (Fire brigade charges) surveyor’s fees etc. are also included as claims expenses. Claims which are incurred and reported are known as outstanding losses if they are not settled. They are also called manifested claims but, incurred but not reported, that is IBNR. These are called unmanifested claims.

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