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Fire destroys block-long building […] Schoeneman who has been providing his services to the Indian and Pakistani community for over 40 years […] According to Schoeneman, throughout Chicago many small businesses and most apartment tenants do not have insurance and some business that do have insurance, do not have sufficient coverage to cover their losses.”
__- India Bulletin, a biweekly national newspaper published in Chicago
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Understanding Business Interruption and Ordinary Payroll

asch-banner5Whenever there is a loss to your business, a major expense for any organization is employee payroll and benefits, as long as they are paid by organization. When considering to buy this insurance for your business most organizations have to decide what type of employee should be paid during the period of restoration and which ones should not. Most insurers use the term “ordinary payroll” to either exclude or to be paid for a specific length of time , usually 90 days or a time period as offered by the insurance company. Basically ordinary payroll is payroll that the organization feels necessary that it must keep during the period of restoration. With the ordinary payroll endorsement in your business income policy the policy holder need not show it was necessary to continue to pay certain expenses. It will be covered for the time period purchased

Understanding Co-Insurance

It is important when you buy an insurance policy that you understand the meaning of coinsurance and by underinsuring your property you will  adversley effect the amount you recover should you have a claim.  Most people do not understand co insurance and many insurance agents also have a very limited knowledge of  how it works should you have a claim.  Co insurance is a penalty imposed on the insured by the insurance carrier for under insuring the value of a property or business income.  The penalty is based on a percentage stated within the policy and the amount under reported.   The most commonly issued coinsurance percentage would be 80% but can be as high as 100%.  The latter (100%) would impose the highest penalty for under reporting.  For this reason it is imperative that property values are accurately reported and updated annually to reflect inflation and other increases in building cost.
Co insurance Example:  A building actually valued at $1,000,000 has an 80% coinsurance clause but it is insured for only $750,000.  Since its insured value is less than 80% of its actual value, when it suffers a loss, the insurance payout will be subject to the underreporting penalty.  For example: It suffers a $200,000 loss the coinsurance formula would be  $750,000/$800,000 x $200,000 equals a recovery of $187,500.00.  The insured has a penalty of $12,500.00.

Debris Removal and Pollution Damage

A fire rips through a auto mechanic and muffler shop causing barrels of oil and antifreeze to explode and spill all over the place and into the parking lot mixing with the water that the fire department used to put out the fire. The insured figured he could rest easy because he had a coverage in his policy called debris removal. What the insured did not know is that there is a difference between debris removal coverage and pollution coverage. In the above case the fire not only caused the debris removal endorsement to kick in but the pollution that was caused by the anti freeze and oil mixed with the water is not covered and is considered pollution and the debis removal endorsement would not cover the pollution clean up. It is very technical coverage. While debris removal coverage will pay for pollution clean up of covered buildings and personal property it does not apply to the cost to extract pollutants form land or water or remove restore or replace pollutants to land or water. Pollutant cleanup and removal is a separate additional coverage that needs to be purchased.

Understanding Ordinance & Law Coverage

The commercial building you own is completely covered because you purchased a replacement cost policy right?    The answer to the question is maybe yes or maybe not.  No matter the age of your building you need to be concerned about Building Ordinance Coverage.  This necessary coverage is too often regarded as necessary only for older buildings.  The fact of the matter is that old and new buildings alike might not meet the current building codes should you suffer a loss.   There is an important endorsement to a policy  that can be purchased entitled building ordinance and law which would offset the increased cost of bringing your building up to code so that it would not come out of your pocket which could be catastrophic to your wallet as the code requirements could add up to serious dollars