USE AND OCCUPANCY INSURANCE 
(Continued from Page 8) 
under contract and other important employees, as 
must hecessarily continue during a total or partial sus- 
pension of business, to the extent only that such 
charges and expenses would have been earned had no 
ire occurred. 
This Item (I) covers expense of necessary heat, light or power, 
che cost of which is prevented from being earned during the 
time of total or partial suspension of business caused by fire. 
This Item (1) does mot cover any portion of the insured’s 
ordinary payroll described in Item II. 
[tem II. §........On the insured’s entire ordinary payroll for a period of time 
not in excess of ninety (90) consecutive days imme- 
diately following loss or damage by fire, which may 
continue during a total or partial suspension of business, 
covering only to the extent necessary to resume the 
normal business of the insured with the same quality 
of service which existed immediately preceding the 
fire, and which would have been earned had no fire 
occurred. 
This Item (IT) does not cover any portion of salaries described 
in Item I. 
The effect of this division is as follows: 
Under Item I, full protection is given on that portion of 
earnings where it is needed. That is to say, on the sum 
(1) of Net Profit and (2) of all annual operating charges 
and expenses, after deducting: 
(a) The full annual cost of Heat, Light and Power, 
which, while not included in the amount of insurance 
required under this item, is nevertheless included in 
the coverage without premium charge, and; 
(4) The full annual cost of Ordinary Payroll. This 
is dealt with under Item II. 
Under Item II, a reduction in the amount of insurance 
is permitted on that portion of earnings where full 
annual coverage is not needed. In the past, many pro- 
spective Use and Occupancy insurance policy-holders 
strenuously objected to maintaining full annual in- 
surance coverage on full ordinary payroll when it was 
known that under no circumstances could they suffer a 
oss on ordinary payroll for a period in excess of, say, 
ninety days. Recognizing the logic of this, and wishing 
to meet the prospective policy-holders’ objection in a 
constructive manner, the insurance companies drafted 
he Blanket Coinsurance form. In consequence, the 
policy-holder enjoys complete coverage by maintaining 
only the amount of insurance required for his actual 
needs, and thus paying a lower premium cost. 
Where earnings are constant or are subject to fluctua- 
tions during definite periods usual to certain classes of 
business, the Blanket Coinsurance form need not 
Other Use 
and 
Occupancy 
Forms