Page 325 - Fire Insurance Ebook IC 57

The Insurance Times

n The inclusion of all wages is the simplest method, specially when
the relative cost is not heavy, as in a highly mechanised factory.

n But in a labour intensive industry this may be expensive as the
premium is calculated on the sum insured representing gross profit.

n Therefore various methods of insuring wages have been devised
bearing in mind adequacy of cover and reasonable cost of premium.

Methods

a) Insurance for the full indemnity period, by inclusion in gross
profit as a standing charge of wages
i) to employees in specified categories, or
ii) to the extent of ............. per cent of the total wage roll, or
iii) to the extent of a stated maximum amount

b) Insurance for a shorter indemnity period of wages (not insured
under above), the sum insured representing the annual amount of
such wages, or if the indemnity period be over 12 months, the
amount for the period.

c) Insurance as "Period" basis or 'Pro-rata' basis. Insurance is for a
shorter indemnity period of wages (not insured under (a) or (b)
above). The sum insured represents wages for the selected
indemnity period only.

d) Dual Basis of insurance
This is a modern method of wages insurance and is becoming
increasingly popular. Under this scheme wages are entirely
removed from the gross profit cover, and are insured as a separate
item.

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