September 14, 2017 Delay In Opening vs. Business Interruption Mark O. Gadaire Senior Vice President, Inland Marine Major Accounts
September 14, 2017 Disclaimer Any opinions or positions expressed in this presentation are the presenter’s own and not necessarily those of any Chubb company. The information, material and descriptions contained herein are intended only as a general overview of certain types of insurance or insurance-related services. The description(s) of insurance coverages, policies or services herein shall not amend, modify, replace, alter, or otherwise changes the terms, conditions, limits, provisions, exclusions or endorsements contained in any policy issued by the insurance companies of Chubb. Please consult your insurance professional and/or policy for precise terms, limits, exclusions and conditions. The description(s) and material(s) contained herein shall not provide a basis for a legal relationship between Chubb and any potential or existing customer and gives no cause to anyone for claims, demands, assertions or other rights towards Chubb or the insurance companies of Chubb, either on a contractual or on a non-contractual basis. The material(s), descriptions of insurance coverage(s) and/or program(s) and/or the information provided herein shall bestow no rights or obligations upon Chubb, or any customer or potential customer and shall not be distributed by anyone for any commercial or non-commercial use, purpose or intention without the express written permission of Chubb. Real Estate CAB │ Scottsdale, AZ 2
September 14, 2017 Introduction: Identifying Differences and Similarities Is there a difference betw een Dela y In Op ening (Dela y ) and Business Interrup tion (BI) ? … The result is the same: Financial Impact, but is the roa d to the end the sa m e Builder’s Risk Property Delay In Business Opening Interruption Tim e elem ent coverage Tim e elem ent coverage Financial associated with a delay protection; associated with a delay to an expected date to an operation arising Resulting associated with a from a physical loss. in a construction project measurable, Trigger point acts at arising from a physical monetary date of loss loss loss. Trigger point varies per policy Real Estate CAB │ Scottsdale, AZ 3
September 14, 2017 Varying Perspectives: Expected Date Let’s discuss the differences betw een… USA carrier form s Broker form s London/ European broker form s Underwriters Vs. Policy Holders Our expectation: Expected date is as defined Is the expectation the sam e in the form, commonly Coverage to reinstate a condition as the Underw riters? described as either: as close as possible to the condition pre-loss. a. Anticipated Date of Completion, or Let’s discuss b. Scheduled Date of Completion Real Estate CAB │ Scottsdale, AZ 4
September 14, 2017 In the Event of a Loss… Trigger Point Ded uctibles Period of Recov ery or Ind em nity Restora tion Period Builder’s Risk trigger Builder’s Risk point varies between deductibles higher due Builder’s Risk Period Builder’s Risk Recovery “earlier of” and “later to challenges with loss Period is equal to the of Indem nity (POI) of” language. adjustment as revenue starts at the POI. is an estimation or Anticipated/Scheduled Property trigger point Property Restoration projection. Date of Completion occurs at the time of Period is the time it takes which commonly the loss. Property deductibles to get back to pre-loss equals the policy lower as revenue is a conditions, plus agreed expiration (and not the proven value. extended POI. loss date). Remember: Period of Value restoration and period of Builder’s Risk Property Delay in a significant loss Delay In Opening Business Interruption will probably be different. Expected Date Tim e 5 Real Estate CAB │ Scottsdale, AZ
September 14, 20177 Closing and questions • Items to Remember: • Items to Note -All is subject to the Policy Limit • At Chubb, our intent is to provide a product that -Builder’s Risk schedules values versus minimizes your risk with a risk transfer product Property which are blanket. that will manage the unintended results when a claim occurs. Real Estate CAB |Scottsdale, AZ 6
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