My insured is a major bank that is looking into lending a large sum of money to a concessionaire that will operate in a yet-to-open professional hockey stadium. The loan will be secured by the expected stream of income the concessionaire is expected to earn. What kind of business income options should I recommend that the bank request from the concessionaire to make sure the bank continues to receive its payments if the concessionaire cannot operate due to an insured loss suffered by the stadium. Keep in mind that a major loss could close the stadium for as much as three years.

Massachusetts Subscriber

No ISO form would provide the coverage the bank needs the borrower to carry, but a manuscript policy could be devised from ISO forms. There are really three problems involved. First, the concessionaire needs a steady stream of income over three years from which to pay the bank. A business income policy incorporating wording similar to the ISO monthly limit of indemnity option found in the optional coverages section of the business income form (CP 00 30 04 02) might be used. Instead of choosing one third or one fourth of the policy limit as the monthly limit, an amount equal to the loan repayments could be paid at one thirty-sixth a month over three years. That type of coverage would provide the required stream of income to satisfy the bank.