FAQs

How do you calculate a sum insured?

We calculate our sum insured the same way we calculate our claims payment, based on turnover.

Calculating a sum insured is basically a 2 step process:

1. Divide Annual Sales by 52 to provide a weekly turnover. We then apply a Rating Classification from a list of IUA Standard Rating Classifications or calculated from the Insured's budgets or Trading Statements.

This then provides the Weekly Sum Insured which is multiplied by the selected Indemnity Period for the maximum benefit payable under weekly benefit.

2. The second step is to include some After Loss Costs or LumpedExtensions. These are to assist the business in returning to normal.

An example is shown below:

In this example we have chosen a 20 week indemnity period as being required. The most appropriate indemnity period will vary from business to business.