Business Interruption Insurance & Claims: Questions & Answers

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Chapter 16

Q16. 1 As most leases contain a Rent Abatement Clause, which allows the tenant to avoid paying rent should the premises be destroyed or substantially damaged, only a landlord need insure rent. That is, it is not necessary for tenants to insure rent expense.


Q16. 2 Where the Insured owns the premises and occupies it solely themselves under the one legal entity, then rent need only be insured once.


Q16. 3 Outgoings need to be included in the Sum Insured/Declared Value for Loss of Rent when it is insured by the Landlord.


Q16. 4 Agent’s commissions need to be insured under Loss of Rent.


Q16. 5 It is easier and simpler to insure Loss of Rent under the material damage section of an ISR policy or Business Pack policy, with no discernable loss of cover benefit.


Q16. 6 The same amount of care is needed when selecting the Indemnity Period for Loss of Rent as is required for Loss of Gross Profit.


Q16. 7 Which of the following need not be considered when selecting the Indemnity Period for Loss of Rent?












Q16. 8 While increased demand caused by a catastrophe, say a weather-related event, can delay the time taken to rebuild premises, it is not really necessary to factor this into determining an adequate Indemnity Period.


Q16. 9 Under an ISR policy, it is prudent to use the same endorsement for Loss of Rent whether the rental income is the sole or majority source of income, or if the rental is only incidental to the main business of the Insured.


Q16. 10 Outgoings are always paid for by the tenant.


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