Business Interruption Extension In Consideration Of The Premium Paid

business interruption extension in consideration of the premium paid, and subject to the exclusions, conditions and limitations of the pol

Business Interruption Extension
In consideration of the premium paid, and subject to the EXCLUSIONS,
CONDITIONS AND LIMITATIONS of the Policy to which this Extension is
attached, and also to the FOLLOWING ADDITIONAL CONDITIONS, EXCLUSIONS
AND LIMITATIONS, this Policy is extended to cover loss resulting from
necessary Interruption of Business caused by Direct Physical Loss or
Damage, as covered by the Policy to which this Extension is attached,
to the Property Insured.
In the event of such Direct Physical Loss or Damage, the Underwriters
shall be liable for the actual loss sustained by the Insured resulting
directly from such necessary Interruption of Business, but not
exceeding the reduction in Gross Earnings, as defined hereafter, less
charges and expenses which are not necessary during the Interruption
of Business, for a period not to exceed the lesser of:‑
a) such length of time as would be required, with the exercise of due
diligence and dispatch, to repair, rebuild or replace such part of the
property as has been destroyed or damaged,
or
b) eighteen (18) calendar months,
commencing with the date of such Direct Physical Loss or Damage and
not limited by the expiration of this Policy.
Due consideration shall be given to the continuation of normal charges
and expenses, including payroll expenses, to the extent necessary to
resume operations of the Insured with the same operational capability
as existed immediately before the loss.
CONDITIONS
==========
1. Direct Loss or Damage
No claim shall be payable under this Extension unless and until a
claim has been paid, or liability admitted, in respect of Direct
Physical Loss or Damage to Property Insured under the Policy to which
this Extension is attached and which gave rise to Interruption of
Business.
This Condition shall not apply if no such payment shall have been
made, or liability admitted, solely owing to the operation of a
Deductible in said Policy which excludes liability for losses below a
specified amount.
2. Values Declared (and Incorrect Declaration Penalty)
The premium for this Extension has been based on a statement of
individual values declared to and agreed by the Underwriters at the
inception of the Policy and stated in the Schedule.
If any of the individual values declared are less than the equivalent
amount of the Co-insurance percentage, as stated in the Schedule, of
the Interruption of Business values, then any recovery otherwise due
hereunder shall be reduced in the same proportion that the individual
value(s) declared bear to the value(s) that should have been declared
and the Insured shall co-insure for the balance.
3. Resumption of Operations
If the Insured could reduce the loss resulting from the Interruption
of Business,
a) by complete or partial resumption of operation of the property,
and/or
b) by making use of Merchandise, Stock (Raw, In Process or Finished),
or any other property at the Insured’s locations or elsewhere,
and/or
c) by using or increasing operations elsewhere,
then such possible reduction shall be taken into account in arriving
at the amount of loss hereunder.
4. Expenses to reduce Loss
This Extension also covers such expenses as are necessarily incurred
for the purpose of reducing loss under this Extension (except expenses
incurred to extinguish a fire), and, in respect of manufacturing
risks, such expense, in excess of Normal, as would necessarily be
incurred in replacing any Finished Stock used by the Insured to reduce
loss under this Extension; but in no event to exceed the amount by
which loss under this Extension is thereby reduced. Such expenses
shall not be subject to the application of any contribution clause.
EXCLUSIONS
==========
This Extension does not insure against:‑
1. increase in loss resulting from interference at the insured
premises, by strikers or other persons, with rebuilding, repairing or
replacing the property or with the resumption or continuation of
operation;
2. increase in loss caused by the suspension, lapse, or cancellation
of any lease, licence, contract, or order, unless such results
directly from the insured Interruption of Business, and then
Underwriters shall be liable for only such loss as affects the
Insured's earnings during, and limited to, the period of indemnity
covered under this Policy;
3. increase in loss caused by the enforcement of any ordinance or law
regulating the use, reconstruction, repair or demolition of any
property insured hereunder;
4. loss of market or any other consequential loss.
LIMITATIONS
1. The Underwriters shall not be liable for more than the smaller of
either:‑
a) any specific Business Interruption Sum Insured stated in the
Schedule,
or
b) the Sum Insured stated in the Schedule, where such includes
Business Interruption, if such is a combined limit,
in respect of such loss, regardless of the number of locations
suffering an interruption of business as a result of any one
occurrence.
2. With respect to loss resulting from damage to or destruction of
media for, or programming records pertaining to, electronic data
processing or electronically controlled equipment, by the perils
insured against, the length of time for which the Underwriters shall
be liable hereunder shall not exceed:‑
a) thirty (30) consecutive calendar days or the time required with
exercise of due diligence and dispatch to reproduce the data thereon
from duplicates or from originals of the previous generation,
whichever is less; or,
b) the length of time that would be required to rebuild, repair or
replace such other property herein described as has been damaged or
destroyed, but not exceeding eighteen (18) calendar months,
whichever is the greater length of time.
DEFINITIONS
===========
1. Gross Earnings are for the assessment of premium and for adjustment
in the event of loss defined as,
The sum of:‑
a) total net sales value of production or sales of Merchandise,
and
b) other earnings derived from the operations of the business,
less the cost of
c) Raw Stock from which production is derived,
d) supplies consisting of materials consumed directly in the
conversion of such Raw Stock into Finished Stock, or in supplying the
services sold by the Insured,
e) Merchandise sold including packaging materials therefor,
f) materials and supplies consumed directly in supplying the
service(s) sold by the Insured,
g) service(s) purchased from outsiders (not employees of the Insured)
for resale which do not continue under contract,
h) the difference between the cost of production and the nett selling
price of Finished Stock which has been sold but not delivered.
No other costs shall be deducted in determining Gross Earnings.
In determining Gross Earnings due consideration shall be given to the
experience of the business before the date of loss or damage and the
probable experience thereafter had loss not occurred.
2. Raw Stock
Material in the state in which the Insured receives it for conversion
into Finished Stock.
3. Stock in Process
Raw Stock which has undergone any ageing, seasoning, mechanical or
other process of manufacture at the Insured's premises but which has
not become Finished Stock.
4. Finished Stock
Stock manufactured by the Insured which in the ordinary course of the
Insured's business is ready for packing, shipment or sale.
5. Merchandise
Goods kept for sale by the Insured which are not the product of
manufacturing operations conducted by the Insured.
6. Normal
The condition that would have existed had no loss occurred.
LMA 5039
14/12/05
Form approved by Lloyd’s Market Association
LMA 5039 14/12/05 Page 6 of 6