Page 339 - Fire Insurance Ebook IC 57

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But this becomes expensive in a labour intensive factory.
So, various methods have been devised keeping in mind
the adequacy of cover and reasonable cost of premium.

(B) Types of methods -
There are several methods devised to insure wages:
(a) Insurance for the full indemnity period, by inclusion

in gross profit as a standing charge (i) To employees
in specified categories, or (ii) to the extent of an
agreed percentage of total wage roll. (iii) to the
extent of a stated maximum amount.

(b) Insurance for a shorter indemnity period is calculated
on the basis of the annual wage amount , or on the
basis of amount of the period, if the indemnity period
is over 12 months.

Some of the methods used are Annual Method and Dual
Basis of insurance.

(C) Annual method -
This method may be arranged for different indemnity
periods. The insurance of a wage roll might be any of
the following types:

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