What does the "maximum period of indemnity" endorsement provide coverage for?

The "maximum period of indemnity" endorsement is an important aspect of business interruption insurance, designed to limit the duration of coverage for loss of income resulting from a covered peril. When this endorsement is applied, it establishes a maximum period, often set explicitly to a specified duration, which in this case is 120 days.

This means that if a business experiences a loss that disrupts its operations, the insurer will only provide coverage for loss of income for a maximum of 120 days from the date of the incident. This approach not only clarifies the insurer's liability but also encourages businesses to respond quickly to return to operations, as coverage will terminate after the designated period regardless of the ongoing impact of the loss.

Other duration options such as 90 days, 150 days, or 60 days do not align with the standard coverage duration specified in this type of endorsement, making the choice of 120 days the most accurate answer.