Schools have several aspects that make them unique risks when evaluating values at risk for a business interruption loss. One of the areas that separates schools from other industries is that there is often a huge lag, or ramp up, for the school to repopulate following a major disaster.
I’ve recently heard from brokers who specialize in insuring schools that they have been able to redefine the “period of restoration” to be the entire school year affected, rather than only when the bricks and mortar are back in place. If it’s true that the “period of restoration” can be applied to the whole school year affected, then that would be awesome news for schools who suffer a business interruption loss! School administrators should check with their insurance broker to verify whether the “period of restoration” in their policy includes the whole school year affected.
One thing that school administrators should keep in mind when renewing policies is the valuation for the extended period of indemnity. For example, if the school calculates their value based on a one year value, assuming they would lose an entire year of tuition and associated income, what happens during the extended period of indemnity of 180 days? The school may have coverage for the extended period, but may have depleted their policy limits during the period of restoration. The bottom line is to make sure to include limits related to an extended period of indemnity.
Need a forensic accountant?
We’re not your typical bean counters. We know how to calculate, present, and defend business interruption insurance claims with off-the-charts winning results for our clients.
We’d love to help you. Please get in touch.
