Question

Question 23 of 25

Business interruption insurance is limited to... ?

A. the reduction in turnover.

B. the reduction in turnover + increased cost of working expenses.

C. the reduction in turnover + fixed cost + increased cost of working expenses ?

Question 24 of 25

An insurance market cycle where excess supply of risk capacity from the insurance sector leads to lower insurance pricing is termed a ... market ?

A. hard

B. soft

C. growing

Question 25 of 25

Gross profit for the purpose of business interruption cover is calculated can be calculate on the ... basis ?

A. difference

B. additions or difference

C. additions

Answer 1

Question 23 of 25

Business interruption insurance is limited to... ?

A. the reduction in turnover.

B. the reduction in turnover + increased cost of working expenses.

C. the reduction in turnover + fixed cost + increased cost of working expenses ?

Answer: C. the reduction in turnover + fixed cost + increased cost of working expenses

The most common form of business interruption insurance covers gross profit (as a result of the reduction in turnover following the loss), fixed costs and any increased cost of working. Hence, the option (c) is correct.

Question 24 of 25

An insurance market cycle where excess supply of risk capacity from the insurance sector leads to lower insurance pricing is termed a ... market ?

A. hard

B. soft

C. growing

Answer: B. soft

The characteristics of a soft market in the insurance industry include Lower insurance premiums, Broader coverage, Relaxed underwriting criteria (which means underwriting is easier), Increased competition among insurance carriers. Hence, the option (b) is correct.

Question 25 of 25

Gross profit for the purpose of business interruption cover is calculated can be calculate on the ... basis ?

A. difference

B. additions or difference

C. additions

Answer: C. additions

The term that insurers use for the addition of net profit and standing charges is 'gross profit'. Hence, the option (c) is correct.