What it does

Business income covers continuing normal operating expenses, but only to the extent they necessarily continue. CP 15 04 removes doubt for the job classifications or employees in its Schedule. Their payroll expenses count as continuing normal operating expenses if the insured pays them, whether or not they are necessary to resume operations. Payroll expenses include payroll, employee benefits directly related to payroll, FICA, union dues and workers compensation premiums.

Key provisions

• Covered for the entire period of restoration and any extension, unless the Schedule sets a maximum number of days. The days need not be consecutive.
• Payroll of employees not named in the Schedule is not affected.

Quoting and selling notes

• Use it when the client would keep paying staff it does not strictly need during the shutdown, to avoid losing them to competitors.
• It is roughly the opposite of the Payroll Limitation or Exclusion endorsement (CP 15 10), which reduces payroll coverage. Review both choices with the client.
• Include the payroll in business income values so the coinsurance requirement is met.