Use and occupancy insurance;

              6 HASKINS & SELLS January
PUBLIC accountants, because of their
contact with business, constitute, per­haps,
as good a medium through which to
test the existence or general use of any
form of insurance as might be found. It
was probably with this thought in mind
that an officer of one of the leading fire
insurance companies recently asked a pub­lic
accountant to what extent, in the course
of practice, accountants find clients carry­ing
use and occupancy insurance.
It is, perhaps, not safe to answer this
question without a fair amount of investi­gation,
in order that the reply may be
based on facts, but the offhand impression
is that such form of insurance is seldom
encountered.
The term itself is extremely vague, and
carries little meaning to the uninitiated.
Insurance men even admit this, and have
gone so far as to suggest a more informa­tive
title, namely, business interruption
indemnity.
There is little wonder that such form of
policy is not more widely taken when one
realizes the complications which enter
into the writing of such policies. It ap­pears
that among insurance people the
matter is a highly technical one, and when
occasion arises in which this form of
policy is indicated, there are many moot
questions which have to be settled more or
less arbitrarily among the companies,
agencies, and brokers. While the out­standing
idea underlying these policies is
to indemnify business concerns for losses
incident to the interruption of business
resulting from fires, the fine lines which
have to be drawn in the settlement of such
losses make it difficult for the average
layman to appreciate the advantages of
such policies.
The average business house probably
insures only against loss of property, and,
as everyone knows, such insurance is
pretty generally carried. It would, how­ever,
appear to be a matter of good busi­ness
judgment to anticipate the possibility
of loss beyond property damage, on ac­count
of the interruption of business,
which is almost certain to ensue after a
fire. Certain expenses and fixed charges
continue, while the income is interrupted.
The organization must be held together
Use and Occupancy Insurance