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Business Interruption: Service Insureds

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The “Business Interruption: Service Insureds” course is designed to help adjusters understand the business interruption assessment for service insureds, including potential coverage issues, gathering documentation, mitigating losses, and calculating the extent of the loss. The module is presented by Mark N. Henry, CPA/CFF, of Morgan Johnson Carpenter & Company, PC, and Anthony DeCesare, Executive General Adjuster of Engle Martin & Associates.

The course begins with an overview of the various types of covered losses which can lead service insureds to suffer a business interruption. Then, the course provides the features of applicable policy components such as automatic daily payments, 12- month limitations, and extended periods of liability. The course also explores in depth the flexible uses of the extra expense coverage. Then, the course reviews three in-depth examples of service insureds from the medical, financial, and professional industries, reviewing the documentation to be gathered, the unique challenges faced by each industry, and the various methods of calculating business interruptions losses. Finally, the course recommends frequent and substantive communication with the insured throughout the handling of the claim.

After completing the course, the attendee will understand how to gather information on the business operation and the loss; how to obtain the appropriate documentation; how to use extra expense coverage to help the insured mitigate losses and return promptly to normal business operations even in the aftermath of widespread natural disaster; how a timing delay in payment can affect business interruption losses; how long-term loss of clients can interact with the period of restoration; how to adjust projected losses by the percentage of charges typically collected; and how to navigate disputed income loss calculations through building trust with the insured.

The course is designed for insurance professionals working in the area of property adjusting.

What CE Credit is available?

Note: To qualify for credit, you must submit completion (including a passed final exam if required) within five days of completing the last quiz. No partial credits will be awarded.

State:
Adjuster General CE Hours:
Adjuster Ethics CE Hours:
Attorney General CLE Hours:
State's Course ID:
NH 2.0 481625
TX (classroom equivalent) 1.0 107209
NC 2.0 206649
FL * ( Provider Number: 364169 ) 3.0 Optional 1173035
IL 2.0 533189
WY 2.0 27639
OK 2.0 1027697
NH 2.0 481625
TX (classroom equivalent) 1.0 107209
NC 2.0 206649
FL * ( Provider Number: 364169 ) 3.0 Optional 1173035
IL 2.0 533189
WY 2.0 27639
OK 2.0 1027697

* This course has been approved by the Florida Department of Financial Services for insurance continuing education credit.

Course Content

Types of Service Insureds and Business Income Coverage
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Lesson Content
  1. Welcome
    1. Introduction to Presenters
    2. Roadmap
    3. Types of Service Insureds
  2. Basic Components of Coverage
  3. Understanding Business Income Losses
    1. Service Interruptions
    2. Civil Authority
    3. Ingress and Egress
    4. Contingent Losses
  4. Relevant Policy Components
    1. Monthly Limits
    2. 12-Month Actual Loss Sustained
    3. Co-Insurance
    4. Negative Income Offset
    5. Salary Coverage
    6. Automatic Daily Loss Payment
    7. Extended Period of Indemnity
  5. Recap
Unique Exposures in Service Industries
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Lesson Content
  1. General Recommendations
    1. Communication
    2. Obtaining Documents
  2. Recommendations for Service Insureds
    1. Temporary Locations
    2. Collectible Percentages
    3. Timing Differences
    4. Other Tips
  3. Unique Exposures in the Medical Industry
    1. Temporary Locations and Special Equipment
    2. Low Collectible Percentages
    3. Continuing Expenses
    4. Potential to Make Up Lost Income
    5. HIPAA Compliance
    6. Documents to Obtain
    7. Documentation Fraud Example
  4. Unique Exposures in the Professional Industry
    1. Working from Home
    2. Continuing Expenses
    3. Documents to Obtain
    4. Unusual Collectible Percentage Example
  5. Unique Exposures in the Medical Industry
    1. Working from Home
    2. Timing Differences in Payment
    3. Loss of Clients
    4. Documents to Obtain
    5. Loss of Client Example
  6. Recap
Interplay of Business Income and Extra Expense
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Lesson Content
  1. Types of Extra Expense
  2. How Extra Expense is Used
    1. List of Uses
    2. Goals of Extra Expense Coverage
  3. Process for Using Extra Expense
    1. Verify Coverage
    2. Learn About the Business
    3. Analyze Options
    4. Adjust to Length of Period of Restoration
    5. General Tips for Managing Extra Expense Coverage
  4. Motorcycle Dealership Example
  5. Short Period of Restoration Example
  6. Overview of Purpose of Extra Expense
  7. Recap
Insurance Agency Loss Scenario
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Lesson Content
  1. Facts of Insurance Agency Loss Scenario
  2. Method #1 – Monthly Deposits
    1. Cash Flow and Historical Monthly Income
    2. Review of Timing Differences
  3. Method #2 – Client Loss and Average Retainage
  4. Method #3 – Client Loss and Period of Restoration
  5. Documents for Saved Expense Analysis
  6. Saved Expense Analysis
    1. Variable vs. Fixed Expenses
    2. Calculating Saved Expenses
  7. Final Calculation of Business Income Loss
  8. Recap
Dentist Office Loss Scenario
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Lesson Content
  1. Introduction to Joplin Dentist Example
  2. Facts of Joplin Dentist Example
    1. Shared Space Unavailable
    2. Intent to Retire
    3. Employee Salary Coverage
    4. Option to Rebuild or Move
    5. Temporary Location
    6. Special Equipment
  3. Calculating Historical Net Income
  4. Projecting Business Income Loss
    1. Projected Lost Revenue
    2. Projected Saved Expenses
    3. Assumptions
    4. Extended Period of Indemnity
  5. Calculating Actual Business Income Loss
    1. Actual Lost Revenue
    2. Actual Saved Expenses
    3. Extra Expense Cost Mitigation
    4. Joplin Dentist Example Summary
  6. Handling Natural Disasters
    1. Unique Issues After Natural Disasters
    2. Permit Issues
    3. Expediting Needs
  7. Recap
Plaintiff’s Law Firm Loss Scenario and Conclusion
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Lesson Content
  1. Facts of Plaintiff’s Law Firm Loss Scenario
  2. Gathering Information
    1. Obtaining Documents
    2. Meeting with Insured
    3. Calculating Loss by Cash Flow
  3. Lost Revenue Calculation
  4. Saved Expenses and Loss Calculation
    1. Saved Expenses
    2. Loss Calculation
  5. Helping Insured Understand Calculation Methods
  6. Conclusion
    1. Communication
    2. Transparency
    3. Period of Restoration
  7. Recap
Get CE Credit or Certificate of Completion.

Submit within 5 days to get CE Credit or Certificate of Completion.

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