USE AND OCCUPANCY INSURANCE 
USE AND OCCUPANCY INSURANCE 
HEN fire visits a place of business engaged in the 
WwW production or distribution of commodities, or 
engaged in selling “Service” (such as Hotels, 
Theatres, Laundries, and some Public Utilities), pro- 
duction and sales either diminish or stop entirely. 
Consequently business earnings either diminish or stop 
entirely. The straight fire insurance policy takes care 
of the necessary repairs and replacements as respects 
the damage to physical property, but it does not pay 
those standing expenses which must be met whether a 
business is operating or not. Nor does it provide for the 
net profits which would have been earned had the fire 
not interrupted. [ To insure a business against loss of 
earnings by reason of interruption by fire, Use and Oc- 
cupancy insurance was designed. It can be main- 
tained at a moderate premium cost. 
In its essence, a Use and Occupancy insurance 
contract operates, during a period of business suspen- 
sion, to provide the same net earnings that a business 
would have enjoyed had no interruption occurred. 
Specifically: 
How Use and 
Occupancy 
Insurance 
Operates 
It pays the net profit which a business would have 
earned. This means that that portion of Net 
Profit which is prevented from being earned by a 
suspension of operations is paid under the 
insurance policy. 
It pays those business charges and expenses which 
continue during a period of business suspension. 
This means that the salaries of officers and other 
valuable employees, wages of labor, interest 
on borrowed capital, taxes, and similar business 
costs which must necessarily continue during a 
suspension are paid under the insurance policy 
and not out of the business reserves which usually 
are needed for other purposes. 
It also pays any extraordinary expenses necessary 
to keep a business operating if possible after a fire,