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March 31, 2016  

 
 Q&A of the Week
Actual Loss Sustained Coverage

A California subscriber recently asked the following question:

Our insured owns a high end antique store, which is 80 percent retail sales and 20 percent furniture restoration and manufacturing of antique replicas. The business income exposure is covered under form CP 00 30 04 02. An alternate proposal has been received offering coverage under a businessowners form, which places the loss of income coverage on actual loss sustained for twelve months. The insured is satisfied with the twelve-month limitation. Completing the annual business interruption worksheet has always been difficult for the insured, and adequate insurance limits are always a concern. The actual loss sustained form would eliminate coinsurance issues and determining adequate limits. We are concerned about the suitability of the form for the restoration and manufacturing operations. Can you point out advantages or disadvantages of the actual loss sustained form for this operation?


ANSWER: The main advantage to the actual loss sustained coverage is that there is generally no maximum; as long as the operations can be resumed within twelve months, the coverage is adequate. However, if the operations cannot be resumed within the time limit, there would not be any business income coverage for loss beyond twelve months. 
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 What's New This Week in FC&S
Telematics

Telematics, or User Based Insurance (UBI) is the latest technology to impact the insurance industry. Read More
 
 Litigation Watch
Bad Faith Accrual

The auto accident victim, as the insured's assignee, brought an action against the auto liability insurer to recover for bad faith failure to settle the claim within policy limits. This case is Connelly v. State Farm Mutual Automobile Insurance Company, 2016 WL 836983.

Brown rear-ended Connelly's car. Brown was insured with State Farm with auto liability limits of $100,000 per person and $300,000 per occurrence. Connelly offered to settle the case against Brown for $35,000 but State Farm rejected the offer. The case went to trial and the jury awarded Connelly $224,271. State Farm paid part of this amount and no more. 
Read More
 
 Fraud of the Week
Claim Fraud – North Carolina
AMOUNT: $649,506.15


A North Carolina man was sentenced to thirty months in prison and ordered to pay $649,506. Read More
 
   
 FC&S Ask the Experts
Did you realize that the Q&A section of FC&S is made up of questions submitted by subscribers like you?

Paid subscribers to FC&S Online or print FC&S Bulletins are invited to submit insurance coverage questions to the editors. We'll provide a personalized opinion within five business days. (We'll let you know if it will be longer than that. Sometimes we have to gather research or other supporting materials).

Who knows? Your question may be featured (anonymously) in the online Q&A of the Week or as an FC&S update.

Submit your coverage interpretation question right to the editors of FC&S for quick and reliable information. Ask our expert staff a question by clicking here.
 
 Maximize Your FC&S
 Online Subscription!
FC&S editors regularly conduct web-based demos of the service. Feel free to contact Christine Barlow, cbarlow@alm.com, to set one up! They only take 30 minutes, a small investment of time that will help you learn all that FC&S Online has to offer.
 
 Contact Us
As always, your comments and questions are welcome.

Contact us at:
FC&S Department
Phone: 800-543-0874
Fax: 859-692-2293
Email: eAlerts@nuco.com
The Zalma Insurance Claims Library
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Insurance Claims: A Comprehensive Guide
The only source you'll need to successfully handle insurance claims from start to finish. More Info
Construction Defects Coverage Guide
Your single-source for identifying, insuring, investigating, prosecuting, and defending cases that result from construction defect claims. More Info
Mold Claims Coverage Guide
This guide will allow you to handle mold insurance claims and litigation resulting from mold or fungi related disputes with confidence. More Info
For more information about these titles Click Here
 
FC&S Team
Kelly Maheu, J.D.
Publisher
  Diane W. Richardson, CPCU
Consulting Editor
Christine G. Barlow, CPCU
Managing Editor, FC&S
  Diana B. Reitz, CPCU, AAI
Consulting Editor
David D. Thamann, J.D., CPCU, ARM
Managing Editor, FC&S Bulletins
  Emily Brunner
Online/Print/Production Editor
Susan L. Massmann, CPCU
Managing Editor, Electronic Publications
  Tosha Brinkman
Marketing Manager
Barry Zalma, Esq., CFE
Contributing Editor
  Donna Cozatchy
Creative Director

 
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