The damages owing to an accident are not limited to damage to goods. Often the stoppage of activity is more damaging for the company than the incident itself. Consequently, it is essential for companies to protect themselves against such eventualities with properly calculated cover and capital, since an inaccurate estimation of the fixed expenses and earnings may reduce the effectiveness of the guarantee.
This is why at Ferrer&Ojeda we take the case-by-case analysis for each company and the calculation of the possible damage very seriously to ensure maximum effectiveness for these tools.
Loss of earnings, according to the insurance definition, is the loss of economic income which it may have been possible to attain in the normal course of business activities had the incident not occurred.
In general terms, insurable consequential losses include:
Expected turnover - variable costs (equivalent to Net Earnings + Taxes on Net Earnings + Fixed Costs)
What does it cover?
Net Earnings including Tax on Net Earnings.
Insured General Permanent Overheads which the Insured Party must pay during the Indemnity Period, in spite of the total or partial disruption of activity.
The following list includes a number of examples from among those items which must be evaluated in order to take out the correct coverage:
> Contributions or subsidies to charities
> Bank charges
> Vehicle maintenance and conservation expenses
> Advertising expenses
> Travelling expenses
> Maintenance expenses for buildings, facilities and machines
> Auditor's Fees
> Lawyers' Fees
> Accounting Experts' Fees
> Wages & Salaries
> Social Security charges
> Pensions and Bonuses
> Staff dining hall or canteen service expenses
> Subsidies to professional institutions
> Subscriptions to journals
> Interest on loans
> Taxes and fiscal charges
> Insurance premiums
> Office material
> Service fees: telephone, post, electricity, water, etc.
> Sundry expenses
Extraordinary Expenses necessarily and reasonably incurred by the Insured Party to prevent or minimise the fall in turnover.
Another highly relevant aspect in these guarantees is the broker's role in the case of claim, since they are important indemnities which are usually preceded by periods of negotiations in which companies' interests have to be defended with full knowledge of the terms and conditions and the insured party's rights.
We are here to help you accurately analyse all items and define the proper cover.
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