Omniasig's Business Interruption insurance up 250% in 4 years

By taking out such a policy, the owner is compensated for losses in terms of profit and expenses related to activity.

"Omniasig relaunched the Business Interruption product four years ago, in a new structure adapted to the requirements of Romanian accountancy standards, and to the existing void in the field of insurance law, so insured persons can benefit from clear risk coverage, and any doubts regarding the calculation of damage compensation can be eliminated," said Bogdan Tudor, Chief Underwriter at Omniasig.

Tudor added that the company has had a positive response from its clients and partners, and registered a 250 percent increase in the volume of subscribed premiums on this type of insurance in the 2003-2007 period.

As concerns this product, the insured amount is made up of the profit and fixed expenditures which will continue throughout the interruption of the business, calculated as the difference between turnover and variable expenses, which will cease during the business interruption. The calculation is based on the previous financial year, as well as on forecasts for current and future financial years, if these impact on the policy coverage through the maximum damage compensation period.

For example, at a €1 million turnover, the company's variable expenses could amount to 40 percent, which would translate to a €600,000 insured amount. This would include the value of fixed expenditures and the company's profit. The premium ratio may vary according to various factors related to risk evaluation, of which the most important is the field of activity of the insured business.

Premium ratios for commercial activities are lower, ranging from 80-100 percent of the premium ratio of the insurance policy for goods. For industrial activities, premium ratios are at least 130 percent of the premium ratio of the insurance policy for goods.

Exceptions do exist, deriving from the appreciation of the maximum possible damage, of the maximum damage compensation period, of the coverage expansion, etc. Business Interruption insurance is not sold separately, but rather is combined with property insurance.

Optional additional coverage could mean compensation for fines and penalties incurred by the company in relation to clients and third parties, professional fees, and additional spending.