Loss of Rent and Alternative Accommodation - The Basis of Settlement of Claims
A) Loss of Rent
The Company will pay in respect of Buildings which have suffered Damage [i] the loss of Rent being
the actual amount of the reduction in the Rent receivable by the Insured during the Indemnity Period solely in consequence of the Damage (including reductions as a direct consequence of the turnover of the lessee’s business being reduced)
[ii] the cost of reletting being
the costs necessarily and reasonably incurred from the date of the Damage until the expiry of the Indemnity Period in reletting the Buildings (including legal fees in connection with the reletting) solely in consequence of the Damage
[iii] the additional expenditure being
the expenditure (other than that recoverable under [ii] above) necessarily and reasonably incurred in consequence of the Damage solely to avoid or minimise the loss of Rent during the Indemnity Period but not exceeding
-
plus -
the amount of the reduction avoided by such expenditure 5% of the Sum Insured by the item (but not more than £250,000) [iv] accelerated reinstatement expenditure being
the additional expenditure necessarily and reasonably incurred during the Indemnity Period in consequence of the Damage solely to avoid or minimise any loss of Rent during the twelve months immediately after the expiry of the Indemnity Period but not exceeding the amount of the reduction avoided by such expenditure
except that in the event of underinsurance the amount payable shall be adjusted in accordance with the Underinsurance Clause
B) Alternative Accommodation
In the event that Buildings occupied totally or partially for residential purposes suffer Damage and no Sum Insured on Rent for the residential portions has been allocated then for the period the Buildings are uninhabitable the Company will pay in respect of such Buildings
[1] the loss of residential Rent if applicable being the actual amount of the reduction in the Rent receivable by the Insured during the Indemnity Period solely in consequence of the Damage
[2] expenditure incurred in respect of the provision of comparable residential accommodation for the benefit of the owner or lessee of any individual flat
Provided that for the purposes of this clause [a]
Indemnity Period shall mean the period beginning when the Damage occurs and ending when the Buildings are fit for occupation but not exceeding a maximum period of three years from the date of the Damage
[b] the Company’s liability any one loss shall not exceed
[1] 30% of the Sum Insured applicable to the Buildings (or residential portion of the Buildings) in respect of residential Rent and the provision of comparable residential accommodation
[2] in the aggregate the Sum Insured applicable to the Buildings (or residential portion of the Buildings) in respect of all Damage to Buildings residential Rent and the provision of comparable residential accommodation
[c] the Insured shall include the owners or lessees of individual flats who shall be subject to the terms conditions and exclusions of this Policy in so far as they can apply
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