Ordinary Payroll and Discretionary Income for Key Employees
Some of our business clients ask us to eliminate coverage for their ordinary payroll. They do so to lower the amount of required coverage on the Business Income Form. Also, many times the business client feels certain that they can easily replace their workforce following a loss.
Did You Know: That instead of eliminating “all” payroll you can limit payroll to take care of a short shutdown such as 60 or 90 days.
Did You Know: That the insurance company has the ultimate choice to “keep” ordinary payroll as a continuing expense even in those situations where ordinary payroll has not been excluded or limited. The policy provides that the payroll expense will be considered “continuing” to the extent necessary to open up with the same quality of service that existed prior to the loss.
Did You Know: That the ISO has introduced the Discretionary Payroll Endorsement CP 15 04 effective 06 07. This endorsement allows a name or job description to be inserted on the form. Additionally the maximum number of days of discretionary income to be included will be designated on the form.
Laurie Infantino, AFIS, CISC, CIC, CRIS, ACSR, CISR
Insurance Skills Center
www.InsuranceSkillsCenter.com