Determining insurable gross profit versus an accounting gross profit can be a headache for policyholders, however if calculated incorrectly, the ramifications on business interruption claim payouts could be impactful. Insurance Times explores the issue as well as possible solutions
Insureds are leaving themselves open to underinsurance on their business interruption (BI) policies by confusing what is meant by ‘gross profit’ within insurance policy documentation versus the general accountancy meaning, said Damian Glynn, director and head of financial risks at Sedgwick.
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