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Glossary of Terms

Additional Increased cost of workingIncrease in Cost of Working has two limitations; expenditure must be for the sole purpose of reducing a Loss of Turnover, and it is subject to an economic limit test. The cover provided by Additional Increase in Cost of Working is broader. This wider cover allows increased costs that maintain the business or service, but which do not necessarily reduce or avoid a Loss of Turnover. For example, the Insured may employ additional accounting staff to ensure debt collection is maintained at the normal rate while their normal staff assist in other areas. In Australia this cover is not subject to the economic limit test, which can be a great advantage, particularly if the expenditure ensures the retention of customers well after the expiration of the Indemnity Period. The costs, however, must be reasonable and incurred in consequence of the damage. Finally, the cover is not subject to any adjustment for under-insurance. However, it is important that the cover is adequate to allow the business person to take all reasonable steps to protect their business during the period of the crisis.