Georgia Property & Casualty Practice Exam

What endorsement in a business owners policy provides coverage for loss of business income due to electrical service interruption?

1. Utility Services - Time Element

2. Utility Services - Direct Damage

3. Protective Safeguards

4. Identity Fraud Expense Coverage

The correct answer is: Utility Services - Time Element

The endorsement that provides coverage for loss of business income due to an electrical service interruption is the Utility Services - Time Element endorsement. This endorsement specifically addresses losses related to the interruption of utility services, including electricity, which can significantly impact a business’s operations and lead to lost income. With this endorsement in place, a business owner can claim to cover the income lost during the period of interruption, as well as any ongoing operating expenses that they still need to pay in spite of not generating revenue due to the service disruption. This is crucial for businesses that heavily rely on continuous electrical service to operate effectively, as it helps mitigate financial risks associated with such interruptions. On the other hand, the Utility Services - Direct Damage endorsement provides coverage for direct physical damage to property caused by the interruption of utility services, rather than for loss of income. Protective Safeguards pertains to implementing measures to reduce risks and potentially earn discounts on premiums, while Identity Fraud Expense Coverage offers protection against expenses incurred due to identity theft, which does not relate to power disruptions.