Does Coinsurance Clause Apply to the BPP and Business Income

[adjusterjack]

If a policy includes BPP coverage, them the business income always comes with it.
So far I haven't seen a separate business income policy.

I'm used to commercial forms with separate limits for Business Income.

However, in this BOP, the 80% requirement applies to damage TO covered property. Emphasis because a Business Income loss is not damage TO covered property, it is a consequential loss resulting FROM damage to covered property.

Further, it is an "Additional" coverage as opposed to an "Optional" coverage. "Additional" coverages are generally included within the property coverage limit (sometimes with or without sublimits) where "Optional" coverages generally have separate limits listed on the declarations page.

That being said, I wouldn't mind seeing a sample declarations page for the BOP.

 

[adjusterjack]

Situations like this are why we keep Jack around and pay him the big bucks

Yes, I'm certainly getting rich off this site. LOL.

 

[Nezha]

Appreciate all the interpretation and share and the insurance humor here...LOL
Happy forums!

 

[Allen Trent]

I still don't understand coinsurance..... I should have finished college....

You didn't insure to actual value at time of the loss, so you as the insured will participate in the loss to the extent that you were carrying too low of coverage to actual at time of loss.

Example: you carry $600k on your policy, but at time of claim you had $1M of actual property. So, you were only insured to 60% . If loss is $100k, You will eat the loss to the extent you were under 80%(60/80). Likely only getting 75k of the $100k loss, minus deductible. Had you been compliant with the 80% or 90% coinsurance clause, the full $100k claim would have been paid, minus deductible. IE: you don't have full coverage if you are only covering a portion of what you actually have

"Did Have" Divided by "Should Have" times Loss minus deductible = Amount you will get. 600k/800k x 100k = $75k minus deductible. IE: $25k coinsurance penalty for trying to elude adequate premiums by staying up to date with valuations/inventory, etc. 80% is the standard as carriers believe a business staying within 20% of what they should carry, but if you are only covering 30% of what you should, you are participating in the loss because you chose not to actually insure for it

That is what i remember from my gender studies college course(s)

 

[Al3x Lee]

You didn't insure to actual value at time of the loss, so you as the insured will participate in the loss to the extent that you were carrying too low of coverage to actual at time of loss. You carry $600k, but at time of claim you had $1M of actual property. So, you were only insured to 60% . If loss is $100k, You will eat the loss to the extent you were under 80%(60/80). Likely only getting 75k of the $100k loss, minus deductible. Had you been compliant with the 80% or 90% coinsurance clause, the full $100k claim would have been paid, minus deductible. IE: you don't have full coverage if you are only covering a portion of what you actually have

That is what i remember from my gender studies college course(s)

Whoa, you're talking way over MIGA's head.

@MIGA1626 , allow me to translate. Insurance man bad, he want more premium to insure full value of property. Mean insurance man penalize you for not insuring property to value.

Yes, I'm certainly getting rich off this site. LOL.

Rich in love and admiration What could be better than that?

 

[MIGA1626]

Whoa, you're talking way over MIGA's head.

@MIGA1626 , allow me to translate. Insurance man bad, he want more premium to insure full value of property. Mean insurance man penalize you for not insuring property to value.

ME INSURANCE MAN.... ME BAD YOU BAD GARRHHHHAAHAHHAHAHAH

 

[adjusterjack]

Rich in love and admiration What could be better than that?

Absolutely.

 

[Markthebroker]

I still don't understand coinsurance..... I should have finished college....

Dude, it's super simple. You can insure something, and I can insure something. That's insurance. But if we BOTH insure it, then we're co insuring.

That's coinsurance.

Duh!

 

[Allen Trent]

Dude, it's super simple. You can insure something, and I can insure something. That's insurance. But if we BOTH insure it, then we're co insuring.

That's coinsurance.

Duh!

That may be stacking that is identifying as coinsurance

 

[Markthebroker]

That may be stacking that is identifying as coinsurance

Well Allen, if you've been paying attention, you know that today the only thing that's important is what you identify as. Not what you are.