The Interruption Underwriting Agencies (“IUA”) policy was designed to provide a less complicated method of insuring business interruption.

The Rating Classification as used in an IUA policy is the industry classification used to determine the premium rate to be applied to the Sum Insured to arrive at the premium.

An IUA policy can be set up to cover what is, in effect, the loss of Gross Profit in the following ways:

• Item 1: Weekly Sum Insured
• Item 2: Seasonal Peak Weekly Sum Insured 
• Item 3: Loss of Rent or Rental Income.

Under Item 1: Weekly Benefit of an IUA policy, besides having a Limit of Liability, the policy also has a Weekly Sum Insured and any payment will be capped to that weekly limit on a week-by-week basis. Adjustments to the average weekly Turnover are allowable under the policy, subject to the Weekly Sum Insured not being exhausted.

There is no Weekly Sum Insured under Item 2: Seasonal Peak Weekly Sum Insured under an IUA policy.

There is no Weekly Sum Insured under Item 3: Loss of Rent or Rental Income under an IUA policy.

Under an IUA policy, where there is more than one location shown on the Schedule and a separate Sum Insured is not shown, the Limit of Liability and the Weekly Sum Insured are simply divided by the number of locations listed to arrive at a location limit.

Unlike the traditional Business Interruption policy, the IUA policy does not provide any Increased Cost of Working cover as part of Item 1: Weekly Sum Insured, or Item 2: Seasonal Peak Weekly Sum Insured, or Item 3: Loss of Rent or Rental Income.

Under Item 4: Lumped Extensions, the IUA policy provides cover for Wages in Lieu of Notice. This is limited to 4 weeks’ ordinary time earnings.

Under Item 4: Lumped Extensions, the IUA policy provides cover for Wages or Salaries not otherwise Recoverable as standard.

Under Item 4: Lumped Extensions, the IUA policy provides cover for Rewriting of Records as standard.

Under any of the items insured automatically under Item 4: Lumped Extensions of the IUA Instant Profits policy, the Insured is able to incur the costs as they see fit and then lodge the expenditure for reimbursement under the terms of the policy.

Under an IUA policy, where there is more than one location shown on the Schedule and a separate Sum Insured for each location is not shown, the Limit of Liability for Lumped Extensions is simply divided by the number of locations shown to arrive at a location limit.

As is the case with a traditional Business Interruption policy, Savings in expenses paid out of insured weekly payments are deducted from the settlement.

You can afford to have a shorter Indemnity Period with an IUA policy than you can with a traditional Business Interruption policy.

You can get a limited doubling of the Indemnity Period under an IUA policy by paying a modest extra premium.

One of the benefits of the IUA policy is the fact that the policy is not subject to any Average or co-insurance penalty for under-insurance.

While the IUA policy does not have a time or monetary deductible for disruption caused by a failure of supply, the policy does have a 48-hour time franchise. This means that claims arising from a disruption to power or some other public utility, would not be covered if the outage was less than 48 hours duration, but the entire claim would be paid if the outage ran for 48 hours and 1 second.

The infectious disease cover provided by IUA’s policy contains an exclusion for diseases that are gazetted as quarantinable. This includes SARS, Avian Flu and the Plague.

The IUA policy contains an automatic reinstatement of the Sum Insured clause.