The article of the month deals with a business income issue. The business income coverage form states that the insurer will pay for the actual loss of business income the insured sustains due to the necessary suspension of the operations. And, business income is defined as net income, that is, net profit (or loss) before income taxes. However, what happens if there is no net profit? Does an operating loss affect the overall business income insurance recovery of the insured? The article of the month presents this issue and provides the answer, using a valued business income form. See the designated article in the Bulletins.

The court cases in the Dec Page come from New York and the Fifth Circuit. The first New York case deals with losses resulting from drain backup. The insured suffered a loss when waste water flooded the basement of his apartment building. The insurer denied coverage based on the water damage exclusion, that is, a loss caused by water that backs up through sewers and drains. The Supreme Court Appellate Division, New York, had to decide if the exclusion applied to the circumstances of the claim. In another case from New York, the same Supreme Court, Appellate Division, analyzed a claim based on the theft or disappearance of money outside the premises of the insured while in the custody of an armored motor vehicle. The Fifth Circuit tackled the question of coverage for an additional insured for a claim resulting from ongoing operations after the operations were completed. The main issue was whether coverage applied only when damages occur during ongoing operations, or when liability arises during those ongoing operations.

Questions and Answers

How is depreciation factored into the calculation of ACV? See Depreciation and Calculation of ACV. Is the need for an engineering report excluded under the ordinance or law exclusion? See Engineering Report and Ordinance or Law. If the insured is no longer living in the covered dwelling, is liability for the insured still extended? See Extension of Liability.When an estimate for repairs is delayed due to the company providing the estimate, does the insurer have to continue paying fair rental value costs? See Late Estimate and Fair Rental Value. When an insured installs an auto lift in the garage, is that personal property or part of the other structure? See Portability and Determination of Personal Property.

AAIS Businessowners Forms

An overview of the coverages provided in the recently revised AAIS businessowners forms, BP 0100 and BP 0200, has been updated, including information on eligibility requirements. See AAIS Businessowners Forms.