A storm that tore through Forestview caused severe damage. All Nation Insurance provided both the commercial property and business income coverage for the resort. The claim was settled satisfactorily except for the business income loss.

There were a total of 24 cabins at the resort. Twenty cabins were rented out for the entire summer following the loss. The other four were not. All Nation denied business income coverage because Forestview did not cease operations as required by the coverage form.

Forestview explained that it ceased some of its operations and requested coverage on only those operations.

Click here to find out how the court ruled.

ISO CP 00 30–Business Income (With Extra Expense) Coverage Form does not use the word “cessation.” It uses the word “suspension” instead. As with six other terms in the coverage form, suspension is defined. The word suspension is defined to include not only complete suspension but also partial. If CP 00 30 had been attached to the Forestview policy, this case would not have gone to court.

Click here to review the PF&M definition section analysis of CP 00 30.

ISO BP 00 03–Businessowners Coverage Form includes Business Income coverage. However, it does not define suspension. The insuring paragraph states that coverage applies for business income lost because of the necessary suspension of operations. This is very similar to the wording in the court case because there is no mention of partial suspension.

Click here to review the PF&M Business Income Additional Coverage analysis
of BP 00 03.

Clients are often encouraged to move from one coverage form to another because of a significant difference in pricing while the coverage is seemingly identical. However, while the names might be the same, the coverage can be considerably different.

Could this also be a selling opportunity? Consider pointing out this coverage gap when you provide a survey to a potential client.

Emarketing is written for your customers. If you subscribe to Producer Online, you have permission to use these articles in your newsletters and on your website. There are currently 226 articles. These are updated regularly and new ones added. Here are some recently added or updated articles:

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