MANAGEMENT

Detailed explanation-1: -The period of indemnity is the length of time the insurance company is obligated to make payments to cover the losses insured under the policy. Typically, an indemnity period will have a time limit stated within the policy, such as 12, 24, or 36 months.

Detailed explanation-2: -The indemnity period commences with the date of damage and lasts till such a time as the business is restored to its pre damaged level or the period stipulated policy which ever comes first. The policy insures earnings of the business lost during the indemnity period.

Detailed explanation-3: -The importance of maximum indemnity periods An MIP is the time during which claims can be made under a policy following a loss. If the MIP expires-be it 12, 18, 24, 36 or 60 months-then claim payments will cease, even if the sum insured has not yet been exhausted.

Detailed explanation-4: -Common Maximum Indemnity Periods are 12 months, 18 months, 24 months and 36 months. When deciding upon the length of the period you need to work out how long it would take your business to recover back to today’s trading levels following a Fire, Theft or Flood.