What it is
The Business Income Report/Work Sheet is the ISO form for showing the financial data behind a business income limit. It sets out revenues, cost of goods and services, net income and operating expenses, including payroll. Insureds use it to estimate how much income and continuing expense would be at risk during a 12-month shutdown.
How it ties to the coverage forms
- To activate the Business Income Agreed Value optional coverage in CP 00 30, a Business Income Report/Work Sheet must be submitted. It must show financial data for the 12 months before the worksheet date and estimates for the 12 months after the option begins. The agreed value should be at least the coinsurance percentage times the projected net income and operating expenses.
- Coinsurance stays suspended only until 12 months after the agreed value takes effect, or policy expiration if earlier. It is reinstated automatically if a new worksheet and agreed value are not submitted, or when the insured asks to change the business income limit.
- Payroll limitation or exclusion choices (CP 15 10) change the payroll included in the worksheet values.
Quoting and selling notes
- Work through the worksheet with the client's accountant using the latest financial statements and next year's projections. Undervalued business income limits are common and lead to coinsurance penalties.
- Diary the agreed value expiration and request a new worksheet at each renewal.
- Forms lists show 10 12 as the current edition in most states, with 06 95 in Florida and Hawaii.
