Business Interruption coverage adequacy assurance services

The question of the adequacy of declared values for Business Interruption coverage may arise at the time of renewal. An underwriter may be requested to remove an averaging clause from the Business Interruption section of a policy. In these circumstances, an underwriter may well wish to seek assurance that the values that have been declared, typically under the ‘Gross Profit’ heading are adequate for the risk that is being assumed.

As a firm of Chartered Accountants, we are able to issue certificates of assurance that the declared values are adequate, once we have reviewed the calculation of the same, together with gaining an understanding of the nature of the business of the entity concerned.

These certificates of assurance can then be used by organisations seeking the cover to provide assurance to the underwriter concerned that the declared values for Gross Profit are adequate for the Indemnity Period for which cover is sought.

In this way, the underwriter is able to provide evidence that external independent assurance has been obtained that the declared values for Gross Profit are adequate and that the commercial risks associated with the removal of an averaging clause in the Business Interruption section of a policy have been addressed.