How is an insurance agencys income loss computed when lost sales impact multiple years in the future?
The Business Income coverage will pay income that is lost only during the recovery period. For most agency’s, their recovery period is usually quite short (a couple of months), unless they own their own building. The income for an insurance agency is from several areas – renewals, new business, and other services. Renewal income is easy to calculate. There may be little loss in this area. Likewise, other services are easy to predict because of the contracts and service agreements involved. Lost new business is harder to predict as the adjuster bases the calculation upon the history of the organization.
