All advertising expenses are included in this expense.
Read more... Advertising expenses continue because the business will require advertising to continue to keep the brand and or products in the public eye. It is therefore recommended that this expense be insured.
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This expense is for power, light, water and or gas.
Read more... There is a fixed charge that will have to continue to be paid after suffering a loss. (non-variable expense, is insured).
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Before you decide whether or not to insure this expense, review your contractual obligations in terms of the supply contract.
Read more... If the contract has a large variable component, this expense need not be insured.
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It is sometimes thought that it is not necessary to include these charges in full.
Read more... However this could leave the insured open to loss if not insured. The costs of lighting and heating on occassions increase because of additional usage outside the times of normal usage. One should therefore insure this expense fully.
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The insurance of salaries and wages will include overtime, bonuses, Read more... holiday pay, sick pay, workmen's compensation insurance premiums and or accident insurance premiums, pension fund contributions and long service leave. Employees are regarded as the most important people for a business. With skills shortage, it is very difficult to replace highly competent and efficient staff. In the event of a loss a business would want to retain such staff. This would necessitate continueing to pay them. One must therefore insure wages and salaries in full. Salaries and wages can be insured separately, please refer to your broker for details.
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Before making a final decision on whether or not to insure this expense, the contractual conditions should be reviewed.
Read more... If the expense is truly variable with turnover, then it need not be insured.
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This cost is generally non- variable.
Read more... It should be insured in full. When it is a variable, it shouldn't be insured.
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This expense will not reduce significantly, following a loss. This must therefore be insured in full.
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Any fees which may arise in the obtaining information required by insurers in connection with a claim, following an insured loss, would be payable in terms of the claims preparation costs cover provided in terms of the policy (the limit being as per that automatically provided) plus the sum insured for additional claims preparation costs, if taken.
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These charges are non-variable and should be insured in full.

In most instances the cost is non-variable and needs to be insured.

Depreciation of buildings, plant, machinery, fixtures, fittings, shopfronts canteen equipment and motor vehicles are regarded as an insurable charge and should be included in full.
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Depreciation of stock is excluded. The need to insure depreciation is more obvious when Business Interruption insurance is extended to include events away from the premises, such as the "prevention of access", "customers", "supplier’s premises", or "failure of a public supply" extensions.
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Whatever effect the damage may have, the directors of a business should continue to receive their normal remuneration.
Read more... Directors work longer and harder during a crisis, therefore they should continue to be compensated.
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Although donations may be largely an optional expense, it is the general practice to insure them fully.

General expenses are considered too small to have its own expense category.
Read more... Such things as parking, stationery, minor repairs, postage, staff amenities would fall into this category. Such expenses are typically fixed or at least semi fixed and it is considered prudent to insure them fully.
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The contract conditions need to be considered.
Read more... In most instances these expenses will continue irrespective of business interruption following damage. When you take the amount paid under the fire & perils cover to settle such agreements, the paying up of such agreements would cause the cessation of the charge and therefore, it is not necessary to insure this expense.

Damage could occur and might interfere with production without destroying the particular plant or machinery, which is the subject of the hiring agreement.
It is for this reason that this expense should be insured in full.
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In the event of damage certain insurance covers are still required.
Read more... As soon as insured property is replaced, insurance will be required to protect it. Other covers such as Public Liability, directors & officers, motor vehicles, grouppPersonal accident, continue to be required regardless of the extent of damage. Undamaged property needs to remain insured. As such, insurance premiums should be insured in full .
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There are a number of interest payments in a business i.e. interest on loans, bank overdrafts, mortgages, and interest or trade accounts.
Read more... Certain interest payments may reduce or even cease after damage, if the money obtained from the Material Damage insurance on the property that is being leased is destroyed, is used to repay the debt on which interest is payable. Remember though that when replacement equipment, plant, machinery etc is purchased, and these purchases are financed, interest will be payable. There are interest expenses that will continue throughout the period of disruption. Because of this all interest payments should be insured.
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See Telecommunications

After damage has occurred one might think that these expenses would fall away until business resumes.
Read more... Some therefore see this as a variable expense and as such not necessary to insure. This is not so. Certain expenses such as running costs and servicing may reduce, but such things as Hire Purchase/Lease repayments, licencing and insurance premiums will continue. Generally expenses for management or business owners' vehicles are included in this category. These are costs that will continue to have to be paid.

Based on what has been said it is suggested that motor vehicle expenses be insured in full.
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These expenses are not proportionate to turnover and are likely to continue during the course of the disruption of the business.
Read more... Such expenses include petty cash disbursements for staff amenities, minor repairs, stationery, specialist photocopying etc. as well as other day to day expenses. These expenses should be insured in full.
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Not all expenses can be catered for in one's books of account.
Read more... One therefore generally finds a "Other Expenses" item. From the explanations already given, you will have gained an adequate understanding as to whether or not the expense is a fixed charge or a variable charge, and thus assist you in deciding as to whether or not a particular expense should or should not be insured.
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The cost of postage will reduce to a certain extent during a period of interruption.
Read more... Having said this, Postage costs are likely to increase due to increased communication/correspondence with customers. It is for this reason that this expense should be insured in full.
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This expense one will find in almost all books of account.
Read more... It is not directly related to Turnover and should be insured in full.
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Even if there is a disruption in business one must still continue to pay Local Auhorities for rates and taxes.
Read more... Rates should therefore be insured in full.
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Rent should always be insured,
Read more... even where the lease agreement makes provision for the paying of rent to cease for total non-occupancy or a reduction in rent in the event of partial loss.
Why this expense needs to be insured is that alternative premises may need to be secured. In instances of disruption to the business there may be no damage to the building. This means that there will be no saving in the rent expense. Another reason for this expense to be insured is that no damage may have occurred but business has been interrupted due to prevention of access, damage at customers' or suppliers' premises, and disruption due to a failure of public utilities.

Other rental payments such as rental for wharves or railway sidings, rent for advertising signs, rent for office machinery, telephone systems etc, and fire and/or burglar alarm systems, should similarly be insured.
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One would think that with a disruption in business as a result of damage expenses for repairs and maintenance would cease.
Read more... The damage suffered could be partial damage. In such instances repair and maintenance expenses will still be incurred, all be it for a reduced amount. In instances where a partial loss has occurred the opportunity to carry out maintence on undamaged machinery and equipment arises. This could in fact increase this expense. One should therefore insure this expense in full.
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Where one has entered into a lease agreement for specific buildings or portions of warehousing premises one is usually expected to abide by the lease agreement
Read more... even in times of business interruption. This expense will not decrease. As such this is a non-variable expense.

One also has the situation where this expense is in the form of "pay on demand" or where the rent is paid according to the quantity of goods stored and/or the length of time they are in storage. This could be looked at as a variable expense. It is however recommended that this expense be insured.
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This is an expense that will have to continue to be paid.
Read more... One might say that in the event of a lengthy business interruption following damage, subscriptions will not be renewed. Having said this, it is likely that subscriptions would almost invariably be renewed especially essential subscriptions such as trade associations and trade journals.

While some may argue that this is an optional expense, it is recommended that it be insured in full. It is typically an expense which, in the scheme of things, is very small. As such, the cost of insurance is negligible, while the benefit of continual subscription can be high in comparison to the premium saving.
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Taxation is chargeable on net profit which is defined as Read more... "resulting from the business of the insured at the premises after due provision is made for all standing charges and other charges including depreciation but before the deduction of any taxation chargeable on profits". As such all taxation by whatever title it may be known is included in the sum insured for Gross Profit. The question of how taxation on profits is to be dealt with does not arise because it is only calculated after the uninsured working expenses are deducted from the amount of Turnover to arrive at the Insured Gross Profit. Therefore, any taxation on trading profits is automatically included in the insurance, and is payable.
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There are different ways of being charged for this expense.
Read more... Firstly there are fixed charges and these should be insured in full. Secondly where the cost incurred is in direct proportion to sales, it need not be insured.
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One would expect this expense to reduce with business interruption following damage, particularly when it comes to the sales force.
Read more... However this is not necessarily the case. In such times it is important to stay close to your customer base. You may find having to call on your customers more regularly. In this instance it would be necessary to insure this expense fully.

The opposite would be true where sales representatives are purely 'cold canvasing'. In this scenario this expense will reduce.

Certain firms pay employees, principals', directors' for the cost of using motor vehicles for social and pleasure purposes. Other costs that would be included here would be the cost of business trips (flights, accommodation and meals). If there are branches dotted all over the country, these expenses would continue. This is a charge to be included.
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It is not often that total losses occur.
Read more... In most instances partial losses are suffered. This expense will continue, and as such should be insured fully.
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