Seasonal Increases in Cover

Seasonal Increase Cover and Periods

Most Business Pack policies provide an additional benefit to factor in that there are certain periods of the year which are much busier than other times of the year. For this reason, a business may carry more stock, or they may employ additional staff and even hire additional equipment.

Rather than either being so busy that you forget to call your insurance broker to review your covers prior to these busy times, the time and extra premium charged to make this change any way or the fact that you may choose to be over insured for most of the year just to allow for your maximum probable loss (therefore paying more than necessary), Insurers provide this clause to allow for peak times.

A typical clause looks very much like the following:

Seasonal increases in the Sum Insured

increase the Sum Insured for Stock in Trade by 30% during the following periods:

a. from 60 days before Christmas Day to the twentieth day following, both days inclusive;

b. from 30 days before Easter Sunday to the twentieth day following, both days inclusive;

unless stated otherwise in the Schedule. Where Stock in Trade is shown in the Schedule as being within an item covering “All Contents including stock”, this additional benefit will apply only to that part of the Sum Insured which relates to Stock in Trade.

However these can vary slightly between insurers. Also the occupation could cause the insurers to endorse the cover accordingly. Or many have the flexibility to allow you to choose periods to suit your business but will limit it to anything between 60 to 130 days or to two periods only. It just depends on each Insurer’s willingness to be flexible or not.

A Florist will probably want to factor in the Valentines Day and Mothers Day Periods. Retail shops will want the Christmas Periods catered for.  So too Medical Professionals who have the end of year rush for services that can be claimed on before the end of the Calendar year.

 Then there is the question on how much is enough? For instance Allianz give 30% of Stock in Trade only on their Business Package, but if you take one of their Retailer’s Packs they will give a 50% increase on both Contents and Stock sums insured.

Other Insurers limit it to the lesser of $75,000 or 30% of Stock in Trade. Some vary the amounts so it is 30% for gazetted Monday Holidays, 25% for the Christmas Period and 35% for the Easter period.

The other crucial issue is what period of the year will the insurer allow these increases. Most give 60 days before Christmas and twenty days after Christmas. They also all 30 days before Easter and 20 days after Easter. However, this can vary amongst insurers. For instance some limit it to only 20 days before Christmas and 10 days after. Some give no periods after Christmas or Easter (assuming stock will be sold), some do not even factor in Easter.

Some Insurers like Vero will allow between 30 and 40% for a maximum of 120 days during any period showing in Financial statements that is normally 30% higher than the average turnover for the year. Not much good for “start ups” but certainly giving flexibility for those occupations that have different busy periods to others.

Office or Professionals packages do not have such clauses normally because they are not expected to carry Stock, though some do. Professions such as Medical Practitioners will carry small supplies of medicines. So this would make sense for them.

Industrial Special Risks (ISR) policies do not automatically provide this cover and it will need to be endorsed in to the cover.

In any case, it is certainly thinking about the different variations in sales and how they affect your Stock at any one time, so if that Fire or bad storm was to occur, you do not find yourself limited by the sum insured being less than the stock being carried by the business.

For a discussion on this and any other issues relating to your insurance, please do not hesitate to call us at CPR Insurance Services.

CPR Insurance are experts that will save you.

  

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