Our insured owns a high end antique store, which is 80 percent retail sales and 20 percent furniture restoration and manufacturing of antique replicas. The business income exposure is covered under form CP 00 30 04 02. An alternate proposal has been received offering coverage under a businessowners form, which places the loss of income coverage on actual loss sustained for twelve months. The insured is satisfied with the twelve-month limitation. Completing the annual business interruption worksheet has always been difficult for the insured, and adequate insurance limits are always a concern. The actual loss sustained form would eliminate coinsurance issues and determining adequate limits. We are concerned about the suitability of the form for the restoration and manufacturing operations. Can you point out advantages or disadvantages of the actual loss sustained form for this operation?

California Subscriber

The main advantage to the actual loss sustained coverage is that there is generally no maximum; as long as the operations can be resumed within twelve months, the coverage is adequate. However, if the operations cannot be resumed within the time limit, there would not be any business income coverage for loss beyond twelve months.