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Business Income Basics...Coinsurance Alternatives

Underinsuring property is a problem that can result in a significant coinsurance penalty. However, underinsuring business income is particularly troublesome given that coinsurance penalties can be catastrophic. This is particularly true when a business experiences sales and profits far beyond those anticipated or if the business is new and really doesn't know how it will perform relative to its pro forma budget. Sometimes it's a wise idea to insure the exposure without coinsurance.

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