Asked by Amber Abugharbieh on Jul 27, 2024
Verified
Business interruption insurance is designed to cover which of the following situations?
A) A person owns a restaurant business and the restaurant is destroyed by fire. The insurance coverage pays for the repair of the building.
B) A person has a partner in his restaurant business and that partner catches a disease and dies. The insurance provides for coverage of the death of the partner.
C) A person owns a restaurant business and the restaurant is destroyed by fire. The insurance covers revenue losses caused by the business being closed down for several months.
D) A person is an employee at a restaurant business and gets ill. The insurance coverage pays him his wages while he is off work sick.
E) A person operates a restaurant business and some customers suffer injury due to food poisoning. The insurance coverage provides for payment to cover any losses incurred because of claims by the restaurant arising from damages paid out to these customers.
Business Interruption Insurance
A form of insurance that compensates the insured for continuing expenses incurred while the business is not earning income.
Revenue Losses
These are decreases in income, typically experienced by businesses or governments, resulting from factors like reduced sales, changes in market conditions, or operational challenges.
Fire
A rapid oxidation process, which is a chemical reaction resulting in the emission of heat and light.
- Grasp the regulations that govern insurance policy agreements, the accumulation of claims, and the elucidation of imprecise terms in favor of the insured individual.
Verified Answer
RS
Reece SpilleJul 27, 2024
Final Answer :
C
Explanation :
Business interruption insurance specifically covers the loss of income that a business suffers after a disaster (such as a fire) while its facility is either closed for repairs or being rebuilt. The scenario in C directly addresses this by mentioning coverage for revenue losses during the closure period due to fire damage.
Learning Objectives
- Grasp the regulations that govern insurance policy agreements, the accumulation of claims, and the elucidation of imprecise terms in favor of the insured individual.