Gross earnings endorsement

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In consideration of the premium paid, and subject to the exclusions, conditions and limitations this policy to which this extension is attached, and also to the following additional conditions, exclusions, and limitations, this policy is extended to cover actual loss sustained resulting from necessary interruption of business insured caused by actual direct physical loss or damage sustained, as covered by this policy to which this extension is attached, to property insured by this policy.

In the event of such direct physical loss or damage, the insurer shall be liable for the actual loss sustained by the insured resulting directly from such necessary interruption of the business insured, but not exceeding the reduction in gross earnings, as defined hereafter, less charges and expenses which are not necessary during the interruption of the business insured, for a period of indemnity not to exceed the lesser of:

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a. Such length of time as would be required, with the exercise of due diligence and dispatch, to repair, rebuild or replace such part of the property insured as has been destroyed or damaged,


b. Eighteen (18) calendar months, 

Commencing with the date of such direct physical loss or damage and not limited by the expiration of this policy.

Due consideration shall be given to the continuation of normal charges and expenses, including payroll expenses, to the extent necessary to resume operations of the insured with the same operational capability as existed immediately before the loss.


1. Direct damage

No claim shall be payable under this extension unless and until a claim has been paid, or liability admitted, in respect of direct physical loss or damage to property insured under this policy to which this extension is attached and which gave rise to the interruption of the business insured.

This condition shall not apply if no such payment shall have been made, or liability admitted, solely owing to the operation of a deductible in said policy which excludes liability for losses below a specified amount.

2. Resumption of operations

If the insured could reduce the loss resulting from the interruption of the business insured,

a. By complete or partial resumption of operation of the property insured,


b. By making use of merchandise, stock (raw, in process or finished), or any other property at the insured‘s locations or elsewhere,


c. By using or increasing operations elsewhere,

Then such possible reduction shall be taken into account in arriving at the amount of loss hereunder.

3. Expenses to reduce loss

This extension also covers such expenses as are necessarily incurred for the purpose of reducing loss under this extension (except expenses incurred to extinguish a fire), and, in respect of manufacturing risks, such expense, in excess of normal, as would necessarily be incurred in replacing any finished stock used by the insured to reduce loss under this extension; but in no event to exceed the amount by which loss under this extension is thereby reduced. Such expenses shall not be subject to the application of any contribution clause.


This extension does not insure against:

1. Increase in loss resulting from interference at the insured’s location(s), by strikers or other persons, with rebuilding, repairing or replacing the property insured or with the resumption or continuation of operation.

2. Increase in loss caused by the suspension, lapse, or cancellation of any lease, licence, contract, or order, unless such results directly from the interruption of the business insured, and then the insurer shall be liable for only such loss as affects the insured‘s earnings during, and limited to, the period of indemnity covered under this endorsement.

3. Increase in loss caused by the enforcement of any ordinance or law regulating the use reconstruction, repair or demolition of any property insured hereunder.

4. Loss of market or any other consequential loss.


1. The insurer shall not be liable for more than the smaller of either:

a. Any specific sum(s) insured for the interruption of the business insured stated in the schedule,


b. The sum(s) insured stated in the schedule, where such includes the interruption of the business insured, if such is a combined limit,

in respect of such loss, regardless of the number of locations suffering an interruption of the business insured as a result of any one occurrence.

1. Gross earnings are for the assessment of premium and for adjustment in the event of loss defined as,

The sum of:

a. Total net sales value of production or sales of merchandise,


b. Other earnings derived from the operations of the business insured

less the cost of

c. Raw stock from which production is derived,

d. Supplies consisting of materials consumed directly in the conversion of such raw stock into finished stock, or in supplying the services sold by the insured,

e. Merchandise sold including packaging materials therefore,

f. Materials and supplies consumed directly in supplying the service(s) sold by the insured,

g. Service(s) purchased from outsiders (not employees of the insured) for resale which do not continue under contract,

h. The difference between the cost of production and the net selling price of finished stock which has been sold but not delivered.

No other costs shall be deducted in determining gross earnings.

In determining gross earnings due consideration shall be given to the experience of the business insured before the date of loss or damage and the probable experience thereafter had the loss not occurred.

2. Raw stock

Materials in the state in which the insured receives it for conversion into finished stock

3. Stock in progress

Raw stock which has undergone any ageing, seasoning, mechanical or other process of manufacture at the insured‘s location(s) but which has not become finished stock.

4. Finished stock

Stock manufactured by the insured which in the ordinary course of the business insured is ready for packing, shipment or sale.

5. Merchandise

Goods kept for sale by the insured which are not the product of manufacturing operations conducted by the insured.

6. Normal

The condition that would have existed had no loss occurred.


All other terms and conditions of this policy remain unchanged.

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