Registered Insurance Brokers of Ontario (RIBO) Practice Exam

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Prepare for the Registered Insurance Brokers of Ontario Test. Study with comprehensive flashcards and multiple choice questions, each question provides hints and detailed explanations. Ace your exam with confidence!

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Is Profits Insurance considered a type of Business Interruption insurance?

No, it is unrelated
Yes, it uses the profit and earnings approach
It is a different category
Yes, but only for retail businesses

The correct answer is: Yes, it uses the profit and earnings approach

Profits Insurance is indeed considered a type of Business Interruption insurance because it is designed to cover the loss of profits a business may incur while it is unable to operate normally due to a covered event, such as a fire or natural disaster. This type of insurance utilizes a profit and earnings approach to calculate the expected profits lost during the interruption period. By covering the profits that would have been earned during the suspension of business operations, it helps businesses recover and stabilize after unexpected disruptions. Other options do not accurately reflect this relationship: some might imply that Profits Insurance has no connection to Business Interruption insurance or categorize it incorrectly.