If a loss occurs, and it is determined that the amount of insurance carried is less than the amount required, a penalty could be placed on the insured. An insured can insure a building for its full value at the beginning of the policy year, but, at the end of the year, it might not be covered for it's full value. This problem can be corrected by adding inflation guard coverage. With inflation guard, the policy limit increases gradually during the policy term so that the total increase amounts to the desired percentage increase at the end of the policy term. This endorsement extends your cause of loss to include damage that results directly from an earthquake.
Coverage is provided for replacement of buildings only.
A separate deductible applies and is determined by the value of the insured property. Business Income Coverage Business Income is the net profit or loss that would have been earned or incurred if the suspension of the business had not occurred, plus any normal operating expenses that must continue during the suspension of the business. Business Income insurance pays the actual loss of business income sustained by the insured because of a necessary suspension of the insured's operation during the period of restoration following a loss. The suspension must result from direct physical loss or damage to real or personal property. Coverage is provided against the same causes of loss covered under the insured's property policy.