BROCHURE: UNDERSTANDING TIME ELEMENT COVERAGES

(December 2025)

Can you afford to face a shutdown after a direct damage loss while your building or personal property is being repaired? Most probably, the answer is a clear "NO!" This coverage helps you recover lost income from the damage and covers additional expenses needed to keep your business operational during repairs.

Disclaimer: The information provided in this brochure does not represent the exact contract terms of the policy. Consult the actual policy for exact definitions, conditions, coverages, exclusions, and limitations. Coverage may vary based on the company's underwriting guidelines and practices.

COVERAGE

This coverage compensates for your lost income resulting from direct physical loss or damage to your on-premises building or personal property. Additionally, it includes coverage for extra expenses you incur to keep operations going or to minimize business income loss.

BUSINESS INCOME

Business income does not always equate to profit; it consists of two parts. The first part is the net income, positive or negative, that you would have earned if there were no losses. This amount is then added to your ongoing expenses after a loss, such as payroll, rent, utilities, and other costs.

EXTRA EXPENSE

Extra expenses refer to costs incurred beyond your normal expenses to ensure your business continues running or to minimize downtime.

Business Income Coverage Period

You choose the period or length of time for coverage to apply. Most coverage forms offer up to 12 months of coverage. However, the duration can be as short as three months. Coverage ends either when the insurance limit is exhausted through payments made by the insurance company or when your business should be able to resume operations, whichever comes first.

Covered Causes Of Loss

Three types of coverage are available. The basic and broad causes of loss forms specify the covered causes of loss, while the special causes of loss form covers any cause not explicitly excluded or limited. It's important to review these forms carefully, as each includes exclusions that can greatly impact coverage.

· Basic Form

Direct physical loss or damage caused by or resulting from fire, lightning, explosion, windstorm, hail, smoke, aircraft, vehicles, riot, civil commotion, sprinkler leakage, vandalism, sinkhole collapse, and volcanic action.

· Broad Form

An intermediate level causes of loss form providing direct physical loss or damage caused by or resulting from glass breakage, falling objects, weight of snow, ice, or sleet, and water damage, in addition to the causes of loss in the Basic Form.

· Special Form

Direct physical loss or damage resulting from risks of direct physical loss or damage not excluded or limited by the policy.

Exclusions

Exclusions and limitations are part of every insurance policy. It's crucial to review them thoroughly, as they can greatly impact your coverage.

Additional Coverages

The following additional coverages are provided at no extra charge:

· Civil Authority

· Alterations and New Buildings

· Extended Business Income

· Interruption of Computer Operations

Coverage Extension

New locations you acquire or construct are automatically covered if your insurance has a 50% or higher coinsurance. The insurance limit is $100,000, and coverage lasts up to 30 days or until the policy period ends, whichever comes first.

Conditions

Loss Conditions outline the responsibilities you and the insurance company have toward each other in the event of a loss.

· How appraisals are handled.

· Duties in the event of loss or damage.

· How to determine the amount of loss.

· How loss payments are handled.

OPTIONAL COVERAGES

There are four optional coverages to choose from:

· Maximum Period of Indemnity

· Monthly Limit of Indemnity

· Business Income Agreed Value

· Extended Period of Indemnity

ENDORSEMENTS

Time Element offers several optional endorsements that can be added to the policy.

REPRINT PERMISSION

PF&M subscribers are permitted to reprint any portion of this brochure for their commercial insurance customers. Other uses require permission by The Rough Notes Company, Inc.