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Model Business Interruption Extension Wordings
The LMA Wordings Forum’s Business Interruption Working Party have for some time been working on a suite of model business interruption (BI) specifications for use as extensions to property damage wordings (to add traditional 'UK type' Insurable Gross Profit etc to the property damage cover).
Whilst there already existed a model ‘Gross Earnings’ form (a ‘US’ form based on ‘loss of production’), LMA5039, and a somewhat outdated ‘Gross Profits – Additions Basis’ specification (‘UK’ specification based on ‘loss of sales’), LMA5081 (which has now been archived), the working party sought to produce an updated suite of model business interruption specifications.
All five wordings have now been approved by the Non-Marine Committee (NMC) and published to the Lloyd’s Wordings Repository (LWR), as follows:
- LMA5328 Business Interruption Extension - Insured Fixed Costs
- LMA5329 Business Interruption Extension - Insurable Gross Profit (Additions Basis – Net Profit plus Insured Fixed Costs – Full Value)
- LMA5330 Business Interruption Extension - Insurable Gross Profit (Difference Basis – Full Value)
- LMA5331 Business Interruption Extension – Loss of Revenue
- LMA5332 Advanced Loss of Profits Extension - Insurable Gross Profit Basis.
In the completion of these specifications the LMA Wording Forum sought input from various technical sources (legal, loss adjusters, forensic accountants) during the drafting process.
These wordings/clauses, as with all LMA model wordings/clauses, are purely illustrative and established and distributed for the guidance of members, who are free to agree to different wordings.
Any queries on the above should be addressed to Alison Colver at alison.colver@lmalloyds.com or 020 7237 8370.
Alison Colver
Head of Wordings
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