Agribusiness Business Income & Extra Expense Worksheet Page 2

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M. Business Income Exposure for Estimated 12 Month Policy Period (carry over from previous page)
$
N.
Period of Restoration: See Note (N)
Adjust for maximum time to rebuild, repair or replace property damaged by serious loss at an existing
location or to move to a new permanent location and resume your normal operations.
e.g. 6 months = .5; 9 months = .75; 12 months = 1.00; 18 months = 1.50; 2 years = 2.00.
Estimated # of Months =
which equates to a factor of
Factor N
MULTIPLY Line M. by Factor N.
=
$
O.
Do you have Seasonal Variations (Peak Season) in your operations? See Note (O)
If NO: Then LEAVE this line BLANK.
If YES: If the Period of Restoration is less than 12 months…
What is the largest percentage of earnings that could be lost?
(as a decimal)
÷
Divide this decimal by Factor N from Line N. above:
=
Factor O
MULTIPLY Line N. by Factor O.
=
$
If the Period of Restoration is greater than 12 months See Note (O) below.
P.
If "Ordinary Payroll" is Limited to
90 days or
180 days, ADD BACK largest payroll amount
+
$
associated with the number of days checked above (consider seasonal peaks in your payroll).
Q.
Minimum Amount of Business Income Insurance needed for your estimated Period of Restoration
=
$
(Sum of Line N + P or Sum of Line O + P)
R.
Extended Business Income: Indicate number of months you anticipate reduced income after resuming
normal operations
months See Note (R)
+
$
ADD amount of estimated reduced income for the number of months indicated above.
S.
Are Extra Expenses to be insured AND included in your Business Income Limit of Insurance?
If YES, ADD Extra Expenses incurred to avoid or minimize suspension of business and continue
+
$
operations. (Calculate using Worksheet on page 3).
If NO, leave blank.
T.
YOUR ESTIMATED AMOUNT OF NEEDED BUSINESS INCOME & EXTRA EXPENSE INSURANCE
=
$
Do not reduce this amount by the Coinsurance Percentage you select below.
See Note (T)
COINSURANCE
: Coinsurance is a REQUIRED policy condition for Business Income Insurance.
Consult your agent or broker to help you determine an appropriate Coinsurance percentage to be stated on your policy. One possible method to
determine a coinsurance percentage is to divide Line Q. by the sum of Lines M. and P. e.g.: Line Q = $7,500,000, Line M + P = $10,000,000.
$7,500,000 ÷ $10,000,000 = 75%.
Your valid options for Coinsurance percentages are shown below. When selecting the most appropriate option ‘round down’. Circle one:
50%
60%
70%
80%
90%
100%
125%
25%
30%
40
50%
60%
70%
80%
90%
100%
125%
DO NOT REDUCE LINE T. ABOVE BY THE COINSURANCE PERCENTAGE.
(N): Period of Restoration - Assume the worst possible situation, such as a devastating fire or explosion and the sprinkler system is impaired, OR
a catastrophe peril such as a tornado or hurricane occurs and severely damages your property. Your ability to resume normal operations may be
impaired by one or more of the following:
1.
Delays in obtaining Architectural & Engineering Plans, Zoning Variances, Building Permits, or approvals from Certification Boards.
2.
Climactic conditions that would prohibit or postpone repairs or rebuilding.
3.
Contractors or others you would depend upon to help you out are loaded with work and have no excess capacity.
4.
You have unique, specialized, customized or imported production machinery.
5.
Time to install, set-up or customize and test repaired or replacement machinery and equipment.
(O): Seasonal Variations – e.g. If 70% of your business is done from January - June the factor to be applied would be: .70 ÷ .50 (for a 6 mo. period of
restoration) = 1.40.
If the Period of Restoration is between 12 and 24 months, calculate the second 12 month’s income and apply the factor to the
second 12 months income, then add this result to the full first year's income (Line M).
(R): After you are back in business, how long will it take to get your business back to pre-loss income levels? Consideration should be given to difficulty
in regaining your customer base, replacing lost or cancelled contracts etc.
(T): A revised worksheet should be completed and submitted to us if your actuals begin to exceed your original estimated amount of needed insurance.
CP-4962 (Rev. 5-06)
2

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