USE AND OCCUPANCY INSURANCE 
enterprise falling into one of the present day major 
activities. Special forms may be obtained to meet 
special or unusual conditions. 
It must always be borne in mind that a Use and 
Occupancy insurance contract will not provide during 
a period of business suspension, any more than the 
amount equal to the “Actual Loss Sustained.” To 
illustrate: An enterprise finds conditions very poor 
and considers closing down for an extended period. 
They learn that during this shut-down period their con- 
tinuing overhead expense would probably be $500 per 
day. They discover that by operating their plant they 
could earn $300 of this indispensable overhead expense, 
thereby reducing their loss to $200 per day. Such a 
risk, insured under a Use and Occupancy insurance 
policy would be entitled to collect only $300 per day 
during a total suspension, thereby placing the policy- 
holder in exactly the same position as he would have 
been had there been no interruption. 
The computation of the amount of Use and Occu- 
pancy insurance necessary to protect fully prospective 
business earnings is a matter for careful consideration. 
Just as it is necessary to ascertain the value of a building 
before it can be properly insured under a fire insurance 
contract, so too is it necessary to analyze the earnings 
of a business before they can properly be covered under 
a Use and Occupancy insurance contract. It would 
be difficult to present a comprehensive and detailed 
table for analyzing all types of earnings because of the 
various and intricate accounting practices of modern 
business. Nevertheless, after considerable research into 
the methods employed by representative major indus- 
tries, the “America Fore” group of insurance companies 
has prepared a “Use and Occupancy Insurance Chart 
showing in flow line the proper procedure for determining 
the amount of insurance necessary for complete coverage 
under current forms.” A reproduction of this chart, 
properly filled in, is inserted in this booklet and is 
accompanied by a detailed explanation. 
Too much stress cannot be laid on the importance 
of selecting the form of Use and Occupancy insurance 
contract which offers the most complete coverage for 
the type of business earnings under consideration. 
Just as some earnings are constant, or fluctuate during 
definite periods usual to certain classes of business, so 
Actual Loss 
Sustained 
How to 
Compute the 
Amount of 
Insurance 
Selection 
of an 
Appropriate 
Form