This article assumes a working knowledge of income statements and other basic business terminology and information. In the interest of simplicity, we'll use the term “agent” to refer to the insurance representative that deals with the commercial account on the coverage level. That person could be the producer, carrier representative, account manager, or have some other title, depending on the organizational setup.

Regardless of title, this material is directed at everyone involved in servicing commercial property insurance, and specifically toward those involved in calculating or reviewing limits for business income (BI) coverage.

There are two areas of the current ISO Business Income Worksheet (CP 15 15, the most recent edition is from 6/95) that are potentially misleading, and which can lead to problems in setting adequate BI limits. Ironically, one area requires following the instructions to the letter in order to avoid problems, while in the second area, following only the instructions on the worksheet can leave an insured with a regrettable shortage in limit (and possible coinsurance penalty) following a loss.