ACCOUNTS RECEIVABLE

The insurance under this Memorandum is limited to the loss sustained by the Insured in respect of all outstanding debit balances provided the Insured is unable to effect collection thereof as the direct result of Damage to records of accounts receivable by a peril not excluded by this Policy.

In addition, the Insurer will pay:

(i) Interest charges at ruling bank rates on any loan to offset impaired collections pending repayment of such amounts rendered uncollectable in consequence of the Damage:

(ii) Interest lost by the Insured in consequence of such impaired collections:

(iii) Additional expenditure necessarily and reasonably incurred in tracing and establishing the amounts of accounts receivable;
(iv) Collection expenses in excess of normal collection costs, incurred in consequence of the Damage.

Where there is proof that a loss covered by this Policy has occurred, but the Insured cannot accurately establish the total amount of accounts receivable outstanding at the date of the Damage, such amount shall be computed as follows:

(a) determine the total amount of accounts receivable outstanding on the last working day of the fiscal month which ended twelve (12) months before the beginning of the month in which the Damage occurs;

(b) calculate the average increase or decrease in the monthly total amounts of accounts receivable outstanding on the last working day of each of the twelve (12) months immediately preceding the month in which Damage occurs;

(c) the amount determined under Clause (a), increased or decreased by the percentage calculated in accordance with Clause (b), shall be deemed to be the total amount of accounts receivable outstanding at the time and date of the Damage;

(d) the amount determined under Clause (c) shall be adjusted as may be necessary to provide for any demonstrable variance from the amount so determined occurring before but during the month in which the Damage occurs; due consideration also being given to normal monthly trends in receipts.

There shall be deducted from the total amount of accounts receivable, however established, the amount of such accounts evidenced by records not lost or damaged, or otherwise established or collected by the Insured, and an equitable amount to provide for doubtful debts.