INTRODUCTION

A deductible usually refers to a fixed dollar amount representing the named insured's share of a covered loss. However, this concept does not apply to time element coverage, where the deductible is measured in terms of time. Instead, a specific period of time, expressed in days or hours, must pass without compensation before loss payments begin.

THE WAITING PERIOD DEDUCTIBLE

The waiting period is a key part of defining the Period of Restoration. It begins 72 hours after a direct physical loss results in the loss of business income caused by a covered event at the described location. The waiting period also applies to business income losses due to acts of civil authorities. Essentially, coverage begins only after three days have passed.

The following business income coverage forms include a 72-hour waiting period for business income losses:

· CP 00 30 – Business Income Coverage Form (including Extra Expense)

· CP 00 32 – Business Income Coverage Form (excluding Extra Expense)

The following forms do not require waiting periods:

· CP 00 50 – Extra Expense Coverage Form

· CP 00 60 – Leasehold Interest Coverage Form

Additionally, the Extra Expense coverage included in both CP 00 30 and CP 00 32 also does not have a waiting period.

AMENDING THE WAITING PERIOD TO 24 HOURS OR LESS

The waiting period can be modified by attaching Form CP 15 56—Business Income Changes – Beginning at the Period of Restoration. The schedule provides two options to amend the waiting period.

· Selecting item A will reduce the waiting period from 72 hours to 24 hours.

· Selecting item B will eliminate the waiting period completely.

PREMIUM CHARGE

The business income rate is increased by a 10% surcharge to decrease the waiting time from 72 hours to 24 hours, or by a 15% surcharge to remove the 72-hour waiting period entirely.