BUSINESS INCOME–SAMPLE MONTHLY LIMITATION WORKSHEET

(June 2019)

This worksheet can be used to calculate a limit of insurance when Monthly Limitation Optional Coverage is selected.

BUSINESS INCOME RISK CATEGORY

Select the following type of business that best describes the named insured's operations:

___ Mercantile/Non-Manufacturing ___ Manufacturing and Mining ___ Rental Properties

MONTHLY LIMIT OF INDEMNITY

Select the recovery period based on the number of months the named insured expects to be out of business:

___ 1/3 for three months

___ 1/4 for four months

___ 1/6 for six months

Note: The maximum limit available for a single month is the fraction selected times the limit selected. Coverage continues until the limit is used up or the period of restoration ends.

DETERMINE OPTIONS TO BE USED

___ Extra Expense

___ Extended Period of Indemnity (Number of days)

___ 60 ___ 90 ___ 120 ___ 150 ___ 180 ___ 270 ___ 360 ___ Other (specify)

DETERMINE THE LOCATION LIMIT

Complete a separate worksheet for each location where coverage is desired.

Element/component	Average estimate for any period of 30 consecutive days	Maximum estimate for any period of 30 consecutive days
Total Net Sales	$	$
Add Other Earnings	$	$
Equals Total Revenue	$	$
Subtract Non-Continuing Payroll	$	$
Subtract Cost of Goods Sold	$	$
Subtract Non-Continuing Utilities	$	$
Subtract Other Special Deductions	$	$
Equals Basic Business Income Monthly Amount	$	$
Multiply the monthly amount by the number of months, either 3, 4, or 6, based on the 1/3, 1/4, or 1/6 recovery option selected	X	X
Equals Basic Business Income Amount	$	$
Add Extra Expense from Extra Expense Worksheet	$	$
Add Extended Business Income and Optional Extended Period of Indemnity	$	$
Equals Total Final Amount	$	$

The total final amount from the average column should be used as the minimum limit of insurance. The recommendation is to use the total final amount from the maximum column to avoid situations where the amount of insurance is inadequate. The average column amount should be used only in cases where the named insured's operations are very stable from month to month and there are no months with peaks or valleys of business activity. Losses frequently occur during peak periods because of increased activity that can lead to accidents, lack of attention to maintenance, high stockpiling of inventory, and higher and more unpredictable customer traffic patterns.

LIMITS OF INSURANCE

Limit: $ ________________	Location Number _____	Building Number _____	Monthly Limitation _____
Limit: $ ________________	Location Number _____	Building Number _____	Monthly Limitation _____
Limit: $ ________________	Location Number _____	Building Number _____	Monthly Limitation _____
Limit: $ ________________	Location Number _____	Building Number _____	Monthly Limitation _____
Limit: $ ________________	Location Number _____	Building Number _____	Monthly Limitation _____
Limit: $ ________________	Location Number _____	Building Number _____	Monthly Limitation _____
Limit: $ ________________	Location Number _____	Building Number _____	Monthly Limitation _____
Limit: $ ________________	Location Number _____	Building Number _____	Monthly Limitation _____
Limit: $ ________________	Location Number _____	Building Number _____	Monthly Limitation _____
Limit: $ ________________	Location Number _____	Building Number _____	Monthly Limitation _____

Comments:

____________________________________________________________________________________________

Named Insured's Signature:

____________________________________________________________________________________________

Title:

____________________________________________________________________________________________

Date:

____________________________________________________________________________________________

Producer's Signature:

____________________________________________________________________________________________

Date:

____________________________________________________________________________________________