Insuring Agreement
In return for “your” payment of the required premium, “we” provide the coverage described herein subject to all the “terms” of the Computer Coverage. This coverage is also subject to the “schedule of coverages” and additional policy conditions relating to assignment or transfer of rights or duties, cancellation, changes or modifications, inspections, and examination of books and records.
Analysis
Like the other two forms, the 7201 promises to provide the coverage described in exchange for payment of the premium. The only difference is that this form talks about “computer coverage” rather than “electronic data processing coverage.”
Definitions
3. ”Business” means the usual business operations occurring at a premises described on the “schedule of coverages”.
9. ”Hardware” . . .
b. Hardware Does Not Include—“Hardware” does not include:
1) ”software”; and
2) ”off-site server” and “on-site server”.
19. ”Restoration period” means:
a. the time it should reasonably take to resume “your” “business” to a similar level of service starting from the date of a physical loss of or damage to covered property at a premises described on the “schedule of coverages” that is caused by a covered peril and ending on the date:
1) the property should be rebuilt, repaired, or replaced; or
2) ”business” is resumed at a new permanent location.
This is not limited by the expiration date of the policy.
b. The “restoration period” also means the increased time required to comply with the enforcement of any ordinance, law, or decree that:
1) regulates the construction, use, or repair of any property; or
2) requires the demolition of any property, in part or in whole, not damaged by a covered peril.
The ordinance, law, or decree must be in force at the time of loss.
”Restoration period” does not mean the increased time required to comply with the enforcement of any ordinance, law, or decree that requires “you” or anyone else to test for, monitor, clean up, remove, contain, treat, detoxify, or neutralize or in any way respond to or assess the effects of “pollutants”.
c. Only as regards coverage described under Off Premises Utility Service Interruption; Interruption of Web Site (if added to this coverage part by endorsement); and Property In Transit in the Supplemental Income Coverages, “restoration period” also means the time it should reasonably take to resume “your” “business” starting from the date of direct physical loss of or damage caused by a covered peril to:
1) property not located at a premises described on the “schedule of coverages” and that is owned by a utility, a landlord, or another utility supplier;
2) ”your” Web site operation that is being maintained or operated by and that is located at the premises of an independent contractor or Internet service provider; and
3) property in transit;
and ending on the date the property should be rebuilt, repaired, or replaced. This is not limited by the expiration date of the policy.
Analysis
Business and restoration period are defined terms in the 7201, but are not in the 7200 or 7202. Since this form covers scheduled locations only, it is important to know what is going on at each location. That is the reason for the inclusion of the definition of business.
A definition of restoration period is added because this form covers loss of income when covered property is damaged by a covered peril. The restoration period defines how long the insurer will pay business income.
The definition of hardware differs from the other two forms in that it only specifies two items as not being hardware—software and servers.
Property Covered
2. Software—
a. Coverage—“We” cover direct physical loss caused by a covered peril to:
1) ”media”;
2) ”programs and applications”; and
similar property of others that is in “your” care, custody, or control. . .
c. We Do Not Cover—Except as provided under Supplemental Coverages, “we” do not cover:
1) ”data records”; and
2) ”proprietary programs”.
Analysis
While forms 7200 and 7202 cover the above two items under software, the 7201 specifies them as not included. The coverage here is limited to media and programs/applications. Data records and proprietary programs are covered with sub-limits under supplemental coverages.
Income Coverage
“We” provide the following coverage unless the coverage is excluded or subject to limitations.
1. Coverage Options—One of the following described coverage options applies when that option is indicated on the “schedule of coverages”:
a. Earnings and Extra Expense; or
b. Extra Expense only.
2. Coverage—
a. Covered Property—“We” provide the coverages described below during the “restoration period” when “your” “business” is necessarily wholly or partially interrupted by direct physical loss of or damage to covered property at a premises described on the “schedule of coverages” as a result of a covered peril.
b. Described Premises and Air Conditioning System—“We” provide the coverages described below under 3. and 4. during the “restoration period” when “your” “business” is necessarily wholly or partially interrupted as a result of direct physical loss of or damage to:
1) a premises described on the “schedule of coverages” that prevents “you” from using covered property; or
2) the air conditioning or electrical systems which are necessary for the operation of covered property and results in a reduction or suspension of “your” “business”.
c. If You Lease Your Premises—If “you” lease, rent, or do not own the premises “you” occupy, for the purposes of determining an Income Coverage loss, “your” location is the space that “you” lease, rent, or occupy including, but not limited to, all passageways to “your” location within the building.
3. Earnings—“We” cover “your” actual loss of net income (net profit or loss before income taxes) that would have been earned or incurred and continuing operating expenses normally incurred by “your” “business”, including but not limited to payroll expense.
4. Extra Expense—“We” cover only the extra expenses that are necessary during the “restoration period” that “you” would not have incurred if there had been no direct physical loss or damage to property caused by or resulting from a covered peril.
a. Expenses To Reduce Interruption—“We” cover any extra expense to avoid or reduce the interruption of “your” data processing operations and continue operating at a premises described on the “schedule of coverages”, replacement location, or a temporary location. This includes expenses to relocate and costs to outfit and operate a replacement or temporary location.
”We” will also cover any extra expense to reduce the interruption of “business” if it is not possible for “you” to continue operating during the “restoration period”.
b. Expenses To Repair/Restore Property and Information—To the extent that they reduce a loss otherwise payable under this coverage, “we” will cover any extra expenses to:
1) repair, replace, or restore any property; and
2) research, replace, or restore information on damaged documents, manuscripts, or records that:
a) are inscribed, printed, or written; or
b) exist on electronic or magnetic media.
Analysis
Form 7201 provides business income coverage with an appropriate indication on the schedule of coverages. The coverage pays loss of income/extra expense if the insured suffers business interruption due to damage to covered property at a location that is listed on the schedule of coverages. The insured may choose earnings and extra expense coverage or extra expense only.
Business income/extra expense is payable if the described premises suffers direct physical loss that prevents the insured from using covered property. Note that the physical loss to the premises does not have to be from a covered peril. Thus, if the insured is renting a building and the building suffers damage from a peril not covered on the 7201, the insured may still collect business income/extra expense if the damage to the building prevents him from using covered property.
Finally, the insured may also collect under this coverage if loss or damage to the air conditioning or electrical systems on the premises result in business interruption. Note that such systems must be necessary for the operation of the insured's business.
Property Not Covered
The list of property not covered on the 7201 is the same as on forms 7200 and 7202:
1. Accounts, Bills, or Documents.
2. Checked Luggage.
3. Contraband.
4. Loaned, Leased, or Rented to Others.
5. Money and Securities.
6. Stock in Trade.
7. Web Site Servers.
Coverage Extensions
The coverage extensions in the 7201 are the same as in the other two forms, with these exceptions:
1. Debris Removal—the 7201 only offers an additional $5,000 of coverage once the limit has been reached (7200, $10,000; 7202, $25,000).
2. Electrical and Power Supply Disturbance—the 7201 only covers such damage if the disturbance occurs within 500 feet of the described premises. This limitation does not appear in the other two forms.
3. Emergency Removal Expenses—the 7201 only offers $1,000 (7200, $2,500; 7202, $5,000).
4. Fraud and Deceit—the 7201 offers $1,000 (7200, $2,500; 7202, $5,000).
Supplemental Coverages
The supplemental coverages in the 7201 are the same as in the other two forms, with these exceptions:
1. Acquired Locations—the 7201 offers $250,000 coverage for sixty days (7200 and 7202, $500,000).
2. Newly Purchased or Leased Hardware—the 7201 offers $250,000 coverage (7200 and 7202, $500,000).
3. Off-Site Computers—the 7201 offers $2,500 coverage (7200 and 7202, $5,000).
4. Property in Transit—the 7201 offers $5,000 coverage (7200 and 7202, $10,000).
5. Proprietary Programs and Data Records—the 7201 offers $5,000 coverage, while the other forms cover these items within the limit of liability.
6. Rewards—the 7201 offers $1,000 coverage (7200 and 7202, $2,500).
7. Software Storage—the 7201 offers $25,000 coverage (7200 and 7202, $50,000).
8. Virus and Hacking—the 7201 offers $5,000 coverage, subject to an annual aggregate of $10,000. The other two forms offer $25,000 coverage, subject to an annual aggregate of $75,000.
Note that the 7201 does not cover telecommunications equipment, while the other two forms cover such equipment for $10,000.
Income Coverage Extensions
Provisions That Apply To Income Coverage Extensions—The following Income Coverage Extensions indicate an applicable “limit” or limitation. This “limit” or limitation may also be shown on the “schedule of coverages”.
If a different “limit” or limitation is indicated on the “schedule of coverages”, that “limit” or limitation will apply instead of the “limit” or limitation shown below.
The following Income Coverage Extensions are part of and not in addition to the applicable Income Coverage “limit”.
1. Interruption by Civil Authority—
a. Coverage—“We” extend “your” coverage for earnings and extra expense to include loss sustained while access to premises described on the “schedule of coverages” is specifically denied by an order of civil authority.
b. Coverage Limitation—The order of civil authority must be a result of direct physical loss of or damage to property, other than at a premises described on the “schedule of coverages” and must be caused by a covered peril.
c. Time Limitation—Unless otherwise indicated on the “schedule of coverages”, this coverage extension is limited to 30 consecutive days from the date of the order.
2. Period of Loss Extension After Business Resumes—
a. Coverage—“We” extend “your” coverage for earnings to cover loss from the date the covered property that incurred the loss is rebuilt, repaired, or replaced and “your” data processing operations are resumed until:
1) the end of 30 consecutive days (unless otherwise indicated on the “schedule of coverages”); or
2) the date “you” could reasonably resume “your” “business” to the conditions that would generate the earnings amount that would have existed had no loss or damage occurred,
whichever is earlier.
b. Coverage Limitation—Loss of earnings must be caused by direct physical loss of or damage to property at a premises described on the “schedule of coverages” as a result of a covered peril.
Analysis
The IM 7201 offers two extensions to business income coverage. The insured may collect under this coverage for up to thirty days if the described premises cannot be accessed due to governmental action. The policy also agrees to extend payment under the income coverage until the insured can reasonably resume operations or thirty days, whichever is earlier.
Supplemental Income Coverages
Provisions That Apply To Supplemental Income Coverages—Unless otherwise indicated, the following Supplemental Income Coverages apply separately to each premises described on the “schedule of coverages”.
The following Supplemental Income Coverages indicate an applicable “limit”. This “limit” may also be shown on the “schedule of coverages”.
If a different “limit” is indicated on the “schedule of coverages”, that “limit” will apply instead of the “limit” shown below.
Unless otherwise indicated, a “limit” for a Supplemental Income Coverage provided below is separate from, and not part of, the applicable Income Coverage “limit”. The “limit” available for coverage described under a Supplemental Income Coverage:
a. is the only “limit” available for the described coverage; and
b. is not the sum of the “limit” indicated for a Supplemental Income Coverage and the Income Coverage “limit”.
The “limit” provided under a Supplemental Income Coverage cannot be combined or added to the “limit” for any other Supplemental Income Coverage or Income Coverage Extension.
1. Acquired Locations—
a. Coverage—”We” extend “your” coverage for earnings and extra expense to include direct physical loss to covered property while at locations that “you” acquire during the policy period.
b. Time Limitation—This coverage applies for up to 60 days from the date “you” acquire the location or until “you” report the acquired location to “us”, whichever occurs first.
However, this coverage does not go beyond the end of the policy period.
c. Additional Premium—”You” must pay any additional premium due from the date “you” acquire the location.
d. Limit—The most “we” pay in any one occurrence for loss of earnings and incurred extra expense at each newly acquired location is $25,000.
2. Earthquake Coverage—If coverage is indicated on the “schedule of coverages”, “we” cover direct physical loss caused by earthquake and volcanic eruption to covered property while at a premises described on the “schedule of coverages”.
3. Flood Coverage—If coverage is indicated on the “schedule of coverages”, “we” cover direct physical loss caused by “flood” to covered property while at a premises described on the “schedule of coverages”.
4. Off Premises Utility Service Interruption—
a. Coverage—Coverage for earnings and/or extra expense is extended to loss of earnings or extra expenses that “you” incur during the “restoration period” when “your” data processing operations are interrupted due to the interruption of an off premises utility services when the interruption is a result of direct physical loss or damage by a covered peril to property that is not located at a premises described on the “schedule of coverages” and that is owned by a utility, a landlord, or another supplier who provides “you” with:
1) power, gas;
2) telecommunications, including but not limited to Internet access; or
3) water.
b. Overhead Transmission Lines Exclusion—If the “schedule of coverages” indicates that overhead transmission lines are excluded, coverage under this extension does not include loss to overhead transmission lines that deliver utility service to “you”. Overhead transmission lines include, but are not limited to:
1) overhead transmission and distribution lines;
2) overhead transformers and similar equipment; and
3) supporting poles and towers.
c. Waiting Period Limitation—Unless otherwise indicated on the “schedule of coverages”, “we” do not pay for “your” loss of earnings under this Supplemental Income Coverage until after the first 24 hours following the direct physical loss of or damage to the property owned by a utility, a landlord, or another supplier. This waiting period does not apply to extra expenses that “you” incur.
d. Limit—The most “we” pay in any one occurrence under this Supplemental Income Coverage is $10,000.
5. Property In Transit—
a. Coverage—Coverage for earnings is extended to loss of earnings during the “restoration period” when “your” “business” is interrupted as a result of a direct physical loss, caused by a covered peril, to covered property in transit.
b. Limit—The most “we” pay in any one occurrence under this Supplemental Income Coverage is $5,000.
6. Sewer Backup and Water Below the Surface—If coverage is indicated on the “schedule of coverages”, “we” extend “your” coverage for earnings and extra expense to include direct physical loss to covered property caused by:
a. water that backs up through a sewer or drain; or
b. water below the surface of the ground, including but not limited to water that exerts pressure on or flows, seeps, or leaks through or into a described premises.
7. Virus and Hacking Coverage—
a. Coverage—Coverage for earnings and/or extra expense is extended to loss of earnings or extra expenses caused by a “computer virus” or by “computer hacking” that results in:
1) direct physical loss or damage to covered “software” and “hardware”; or
2) denial of access to or services from “your” “hardware” or “your” computer network.
b. We Do Not Cover—”We” do not cover loss of earnings or extra expenses under this Supplemental Income Coverage that results from:
1) loss of exclusive use of any “data records” or “proprietary programs” that have been copied, scanned, or altered;
2) loss of or reduction in economic or market value of any “data records” or “proprietary programs” that have been copied, scanned, or altered;
3) theft from “your” “data records” or “proprietary programs” of confidential information through the observation of the “data records” or “proprietary programs” by accessing covered “hardware” or “your” computer network without any alteration or other physical loss or damage to the records or programs.
Confidential information includes, but is not limited to customer information, processing methods, or trade secrets.
c. Waiting Period Limitation—Unless otherwise indicated on the “schedule of coverages”, “we” do not pay for “your” loss of earnings under this Supplemental Income Coverage until after the first 24 hours following the direct physical loss of or damage to “your” data processing operations. This waiting period does not apply to extra expenses that “you” incur.
d. Limit—The most “we” pay in any one occurrence under this Supplemental Income Coverage is $5,000.
The most “we” pay for all covered losses under this Supplemental Income Coverage during each 12-month period of this policy is $15,000.
Analysis
The IM 7201 offers supplemental income coverages. The introductory paragraph makes clear that the limit shown for each supplemental income coverage is all that is available for that coverage.
The first coverage provides $25,000 for loss of earnings at a newly acquired location. This coverage only applies for sixty days after the insured acquires the new location.
Numbers two and three provide earnings coverage in case of loss to property from earthquake or flood.
Coverage four pays lost earnings in case the insured suffers damage from an off-premises utility interruption. The insured may choose to cover or to exclude overhead power lines. Business income under this coverage is not paid for the first twenty-four hours, but extra expense is picked up immediately.
If the insured suffers a business income loss due to damage to covered property in transit, the policy pays $5,000. If covered property is damaged by a sewer backup or water beneath the surface of the ground, business income and extra expense are payable.
The final supplemental income coverage pays business income/extra expense if the insured suffers a loss from computer hacking or a computer virus. The limit of liability is $5,000 per occurrence, with an annual aggregate of $15,000.
Perils Covered and Exclusions
“We” cover risks of direct physical loss unless the loss is limited or caused by a peril that is excluded.
2. ”We” do not pay for loss or damage if one or more of the following exclusions apply to the loss.
c. Electrical and Power Supply Disturbance—”We” do not pay for loss caused by “electrical disturbance” or “power supply disturbance” if the cause of such disturbance took place more than 500 feet from the premises where the loss occurred.
However, if disturbance coverage beyond 500 feet is indicated on the “schedule of coverages”, then the Electrical and Power Supply Disturbance exclusion described above is deleted.
d. Loss of Use—”We” do not pay for loss caused by or resulting from loss of use, business interruption, delay, or loss of market.
This exclusion does not apply to the coverages described under Income Coverages, Income Coverage Extensions, and Supplemental Income Coverages.
4. ”We” do not pay for loss of earnings or extra expenses, as described under Income Coverage, caused by or resulting from one or more of the following:
a. Error or Omission In Programming—”We” do not pay for extra expense caused by an error or omission in programming or incorrect instructions to “hardware”.
b. Leases, Licenses, Contracts, or Orders—”We” do not cover any increase in loss due to the suspension, lapse, or cancellation of leases, licenses, contracts, or orders.
However, “we” do cover loss during the “restoration period” if the suspension, lapse, or cancellation results directly from the interruption of “your” “business”.
”We” do not cover any extra expense caused by the suspension, lapse, or cancellation of leases, licenses, contracts, or orders beyond the “restoration period”.
c. Strikes, Protests, and Other Interference—”We” do not cover any increase in loss due to interference by strikers or other persons at a premises described on the “schedule of coverages”. This applies to interference with rebuilding, repairing, or replacing the property or with resuming “your” “business”.
d. Utility Failure—Except as provided under Supplemental Income Coverages—Off Premises Utility Service Interruption, “we” do not pay for loss caused by or resulting from the failure of a utility to supply electrical power or other utility service to a described premises, if the failure takes place away from the described premises. “We” do not pay for loss caused by or resulting from the failure of a utility to supply service regardless of the cause of failure.
e. Interruption of Web Site—”We” do not pay for loss caused by or resulting from the interruption of “your” Web site. “We” do not pay for loss caused by or resulting from the interruption of “your” Web site regardless of the cause of the interruption.
Analysis
The IM 7201, like the 7200 and 7202, provides open perils coverage for the covered property. The exclusions define the coverage.
Most of the exclusions in the 7201 are just like those in the 7200 and 7202:
1. Civil Authority.
2. Earth Movement.
3. Flood.
4. Nuclear Hazard.
5. Sewer Backup and Water Below the Surface.
6. War and Military Action.
7. Computer Virus or Computer Hacking.
8. Criminal, Fraudulent, or Dishonest Acts.
9. Pollutants.
10. Temperature/Humidity.
11. Voluntary Parting.
12. Contamination, Deterioration, Rust, or Corrosion.
13. Wear and Tear or Obsolescence.
Unlike the 7200 and 7202, form 7201 excludes damage done by electrical disturbance, if the disturbance occurs more than 500 feet from the premises. Coverage for such a disturbance may be purchased.
Since the 7201 automatically covers lost income, the form specifies that the loss of use exclusion does not apply to any of the income coverages.
Again, because the 7201 covers lost income, a new set of exclusions has been added that apply only to the income coverage. Any error or omission in programming the insured's hardware that results in lost income is not covered.
If the insured suffers an income loss because a customer cancels a license, contract, or lease, there is no income coverage under the 7201. However, if the insured has already suffered a covered loss and the customer cancels as a result of that loss, then that lost income is covered.
After a covered loss, additional people may be working at the described location. If a strike by those people interferes with the restoration and results in a large income loss, that larger loss is not covered.
Loss caused by utility failure is not covered, other than as described in the supplemental income coverages.
Finally, the policy does not provide income coverage that results from the interruption of the insured's Web site.
What Must Be Done in Case of a Loss
4. Intent To Continue Business – Income Coverage—If “you” intend to continue “your” “business”, “you” must resume all or part of “your” “business” as soon as possible.
Analysis
The only loss condition in the 7201 that differs from the 7200 and 7202 is this one. It requires the insured to resume his business as quickly as possible.
Valuation
1. Hardware—The following is the value of “hardware”:
a. Replacement Cost—The value of “hardware” will be based on replacement cost without any deduction for depreciation unless Actual Cash Value is indicated on the “schedule of coverages”.
1) Replacement Cost Limitation—The replacement cost is limited to the cost of repair or replacement with similar materials on the same site and used for the same purpose. The payment will not exceed the amount “you” spend to repair or replace the damaged or destroyed property.
2) Replacement Cost Does Not Apply Until Repair or Replacement—Replacement cost valuation does not apply until the damaged or destroyed property is repaired or replaced.
3) Time Limitation—”You” may make a claim for actual cash value before repair or replacement takes place, and later for the replacement cost if “you” notify “us” of “your” intent within 180 days after the loss.
b. Actual Cash Value—When Actual Cash Value is indicated on the “schedule of coverages”, the value of “hardware” will be based on the actual cash value at the time of the loss with a deduction for depreciation.
5. Earnings—
a. Determining An Earnings Loss—In determining an earnings loss “we” consider:
1) the experience of “your” “business” before the loss and the probable experience during the time of interruption had no loss occurred;
2) ”your” continuing operating expenses normally incurred by “your” “business”, including, but not limited to, payroll expense necessary to resume “business” to a similar level of service that existed before the occurrence of direct physical loss or damage; and
3) pertinent sources of information and reports including:
a) ”your” accounting procedures and financial records;
b) bills, invoices, and other vouchers;
c) contracts, deeds, and liens;
d) reports on feasibility and status; and
e) records documenting “your” budget and marketing objectives and results.
b. Conditions For Non-Payment of Increased Loss—”We” do not pay for any increase in loss due to “your” failure to use reasonable efforts to resume all or part of “your” “business”. This includes making use of other locations and property to reduce the loss.
c. Loss Payment If You Do Not Resume Your Business—If “your” “business” is not resumed as soon as possible, or if it is not resumed at all, the value of loss payment is based on the period of time it would have otherwise taken to resume “your” “business” as soon as possible.
6. Extra Expense—In determining extra expenses that “you” have incurred, “we” consider the salvage value of any property bought for temporary use during the “restoration period” and it will be deducted from the amount of loss determined for extra expense.
Analysis
These are the valuations provisions of form 7201 that differ from forms 7200 and 7202. Both forms call for replacement cost settlement of hardware losses. Both also pay only actual cash value (ACV) until the property is actually replaced. However, the 7201 gives the insured 180 days to decide upon ACV or replacement cost. The other forms do not have that limitation for hardware.
Since the 7201 covers lost income, it naturally outlines how an income loss claim is valued. For more on how income and extra expense losses are valued, see Business Income (and Extra Expense) Coverage Form.
How Much We Pay
6. Coinsurance, Income Coverage Part—
a. When Coinsurance Applies—”We” pay only a part of the loss if the “limit” is less than the coinsurance percentage multiplied by the sum of:
1) ”your” net income (net profit or loss before income taxes); and
2) continuing operating expenses
projected for the 12 months following the inception of this policy or the last previous anniversary date of this policy (whichever is later), normally earned by “your” “business”.
b. How We Determine Our Part of The Loss—”Our” part of the loss is determined using the following steps:
1) multiply the coinsurance percentage by the sum of “your” net income and continuing operating expenses projected for the 12 months following the inception of this policy or the last previous anniversary date of this policy;
2) divide the “limit” by the figure determined in 1) above;
3) multiply the total amount of loss by the figure determined in 2) above.
”We” pay the amount determined in 3) above or the “limit”, whichever is less. “We” do not pay any remaining part of the loss.
c. When Coinsurance Does Not Apply—Conditions for coinsurance do not apply:
1) unless a coinsurance percentage is indicated on the “schedule of coverages”; and
2) to coverage for extra expense.
9. Income Coverage Limit—”We” pay no more than the Income Coverage “limit” indicated on the “schedule of coverages” for any one loss. Payment for earnings and extra expense combined does not exceed the “limit”.
10. Waiting Period—
a. Waiting Period Limitation—If an Income Coverage waiting period is indicated on the “schedule of coverages”, “we” do not pay for “your” loss of earnings until after the first 24 hours (unless otherwise indicated on the “schedule of coverages”) following the direct physical loss of or damage to covered property caused by a covered peril.
This waiting period does not apply to extra expenses that “you” incur.
b. Waiting Period Limitation For Civil Authority—As regards coverage under Interruption by Civil Authority, coverage under this extension begins:
1) for earnings, 24 hours (unless otherwise indicated on the “schedule of coverages”) after the time the order is issued and ends 30 consecutive days and 24 hours from the date of the order; and
2) for extra expense, immediately after the time the order is issued, and ends 30 consecutive days and 24 hours from the date of the order.
c. Other Waiting Period Limitations—The waiting period described under Off Premises Utility Service Interruption and Virus and Hacking Coverage is not deleted nor replaced by the terms of this provision.
Analysis
Again, because coinsurance applies to the income coverage, the 7201 contains this condition. It explains the procedure for applying a coinsurance penalty, if necessary. The policy imposes a twenty-four-hour waiting period (deductible) before paying income loss. If the income loss and extra expense are incurred as a result of the order of civil authority, there is a twenty-four hour waiting period and maximum period of indemnity of thirty days.
Loss Payment
This section in the 7201 is exactly the same as in the 7200 and 7202.
Other Conditions
2. Income Coverage (Appraisal)—If “you” and “we” do not agree on the amount of net income (net profit or loss before income taxes), payroll expense, and operating expenses, these amounts may be determined by appraisal in accordance with the provisions described above under 1. Appraisal.
Analysis
Because the 7201 includes income coverage, it lays out a method to be followed if the insured and insurer disagree about the valuation of an income loss. Such a dispute is to be settled in accordance with the appraisal provision.