Q&A: insurance

Yes, this insurance is called business interruption insurance (loss of profit insurance). Property insurance covers only the building, equipment and goods. The lost profit and the continuing fixed costs for the months when the cafe is closed are covered by a separate policy. This is general insurance practice; the exact terms are written in the insurer's policy and rules.

Remember three things about this insurance:

1. It is usually tied to damage to property: property must first have been damaged, that is, an insured event must have occurred. It does not pay simply because "customers did not come" (read the exact condition in the policy).
2. What it covers is defined in the policy. Usually lost profit and continuing costs are meant; variable costs (such as raw materials) are not covered because they are saved when operations stop. The insurance concept of "gross profit" may not be the same as an accountant's gross profit: read the definition in the policy.
3. The indemnity period is limited. This period (the longest period the insurer pays for) is set in the policy. If the cafe stays closed longer, the remaining months are not covered.

Example (compiled by the author, hypothetical). Monthly figures of "Bahor cafe":

After the fire the cafe stays closed for 3 months. The actual loss: - revenue is lost: 90 × 3 = 270 million; - variable costs saved: 54 × 3 = 162 million; - fixed costs saved: 4 × 3 = 12 million; - net loss: 270 − 162 − 12 = 96 million soums. In other words, 32 million soums per month: 8 million of profit and 24 million of continuing fixed costs.

If the policy's indemnity period is 3 months, these 96 million soums may be reimbursed (the exact calculation depends on the policy formula). But if rebuilding takes 5 months, the loss of the remaining 2 months, 64 million soums, stays outside the insurance. So do not choose an indemnity period shorter than the real recovery time: take into account the time for permits, repairs and delivery of equipment.

When choosing a policy, ask: how long is the indemnity period; how is gross profit calculated; is it paid even if the property damage is not insured; are losses from a supplier or power supply interruption covered.

Source: general insurance practice (business interruption insurance, indemnity period, the concept of gross profit). The exact terms are written in the policy text. The calculations were compiled and checked by the author.

The certificate is issued. Under the third paragraph of clause 29 of Instruction No. 2667, for a repeat pregnancy of a woman on childcare leave (until the child reaches the age of two and three years) or on additional leave without pay, the certificate is issued on general grounds. The 56 and 70 calendar days in the first two paragraphs of this clause are for other cases: for the person caring for the child when the mother dies, and for the person who adopts a newborn child (the guardian).

The benefit is calculated under clause 28 of the Regulation (Resolution No. 796, Appendix 4; as amended by Resolutions No. 239 and No. 440):

Mini example (compiled by the author, hypothetical): Zebuniso has not come back from leave and no wages were accrued in the months of leave, so the last 12 months for which wages were accrued are the months before the leave; a total of 60,000,000 soums was accrued in them. 60,000,000 : 12 = 5,000,000 soums; there are no months after the leave with accrued wages (fewer than 3), so the average earnings taken into account are 5,000,000 × 0.5 = 2,500,000 soums (comparing them with the minimum consumer expenditure amount is a separate step). This is not the benefit itself: how it is applied together with the length-of-service coefficient of clause 24 is not clear from these clauses, so clarify this with the fund or the employer.

On the number of children: clauses 7, 17, 23, 24, 25, 28 of the Regulation and clause 29 of the Instruction contain no limit depending on the number of children. We did not review the other clauses of the Regulation and the Instruction in this answer, so check the specific situation against the full text.

The coefficient is applied to average monthly earnings depending on the number of months of insurance record (Resolution No. 796, Appendix 4, clause 24 of the Regulation):

The table starts at 10 months because the maternity benefit requires an insurance record of at least ten months (clause 7, "b"). In addition, the record must not have been interrupted in the last six months before the month in which the insured event occurred (clause 7, "v"); for a repeat benefit this six-month requirement does not apply (clause 28).

Mini example (compiled by the author, hypothetical; average monthly earnings assumed to be 8,000,000 soums):

The one-month difference between Dildora's and Zarnigor's records raised the coefficient by 10 percentage points. So count the record month by month and check the boundary months (24/25 and 60/61) separately. The benefit is calculated for the period shown in the certificate, also taking into account the requirements of clause 17 of the Regulation (clause 25): Sundays and non-working public holidays under Article 208 of the Labour Code falling within the period are not taken into account when calculating the amount of the payment, and for voluntarily insured persons there is also the upper cap in clause 25.

Here the market price is not the right yardstick. The key question in building insurance is: "how much money will be needed to rebuild the building after a fire or another event?" The market price also includes other things: the land plot, the location, the surrounding infrastructure. Land does not burn and is not lost in a flood, so insuring its value may be pointless.

How the sum insured is set depends on the contract conditions, so read how the value is determined in the policy. The general logic is as follows.

Example (prepared by the author, hypothetical figures). The "Ipak yo'li servis" building has an area of 400 m². The estimated cost of constructing a building of this type is 2.2 million soums per m². We add another 10% for removing debris and design work.

• Rebuilding: 400 × 2.2 = 880 million soums.
• Demolition, clean-up, design (10%): 88 million soums.
• Total reinstatement value: 968 million soums.

The rest of the 1.5 billion soum market price is mainly the price of the land and the location.

Insuring at the market price means about 1.06 million soums of extra premium a year, while in the event of a loss the compensation still does not exceed the actual loss.

There is also the opposite mistake: insuring the building at its carrying amount on the balance sheet. If the policy has a proportional cover condition and the loss amounts to 300 million soums, the compensation will be about 300 × 400 ÷ 968 ≈ 124 million soums. The company covers the rest itself.

Practical tip: determine the reinstatement value with an independent valuer or a construction cost estimator, and review it every year when renewing the policy.

Yes, there is a risk that is hard to notice but serious. The prices of building materials, wages and equipment keep rising, while the sum in the policy stays the same. As a result, the warehouse is insured for a smaller percentage year after year. This is especially dangerous if the policy has a proportional cover condition: compensation is reduced even for a partial loss.

Example (prepared by the author, hypothetical figures). The reinstatement value of the "Yashil dala agro" warehouse was 400 million soums three years ago. Suppose construction costs rose by a hypothetical 10% every year:

Now a 100 million soum loss occurs in the third year. If the policy has a proportional cover condition, the compensation is about 100 × 400 ÷ 532.4 ≈ 75.1 million soums. That is, simply because it changed nothing, the company bears nearly 25 million soums of the loss itself.

To avoid this:

1. Recalculate the reinstatement value every year before renewing the policy: area × current construction cost, plus clean-up and design costs.
2. Ask the insurer whether there is a condition for automatic indexation of the sum or one that allows the sum to rise up to a certain limit during the year. Such conditions differ from insurer to insurer, so read their exact wording in the policy.
3. If a major repair or extension of the warehouse is carried out during the year, inform the insurer at once and increase the sum.
4. Estimate the difference in premium: raising the sum from 400 to 532 million raises the premium in roughly the same proportion, but this may be much smaller than the risk of losing 25 million soums.

This also applies to equipment and stocks of goods: their prices change too, while the sum insured does not update itself.

At such a moment a hasty mistake can make it harder to get compensation. Every policy sets out what to do when an insured event occurs: whom to notify, by what method and within what time. So one of the first steps is to open the policy and read it. The general practical procedure is as follows.

1. Stop and reduce the damage. Shut off the water and move the dry goods to a safe place. This is in your own interest too: every item saved reduces the loss.
2. Notify the insurer by the method stated in the policy. Even if you have phoned, also send a written notice and keep a copy.
3. Record everything. Take photos and videos of the wet goods, the burst pipe and the condition of the warehouse.
4. Do not throw away or sell the damaged goods until the insurer's representative has seen them, unless he permits otherwise.
5. Draw up a report: what was damaged, how much and in what condition, signed by the members of the committee.
6. Carry out a stocktake: compare the balance after the event with the balance in the records. The amount of the loss comes from this comparison.
7. Collect the documents: purchase documents for the goods (invoices), warehouse cards, information on who installed or repaired the pipe.
8. Identify the party that may be at fault. For example, if a contractor recently replaced the pipe, preserve the right to claim against him: the insurer that paid compensation may later recover from the party at fault under this right.

Example (prepared by the author, hypothetical figures). The "Bahor tekstil" warehouse held 80 million soums worth of fabric. The storekeeper immediately shut off the water and moved part of the fabric to a dry room; the movers were paid 2 million soums for this. As a result, 50 million soums worth of fabric was saved and the loss came to 30 million soums. Had nothing been done, the loss could have reached the full 80 million. Such costs incurred to reduce the loss may also be covered, but check this in the policy conditions and keep the receipts.

Keep in mind: if the policy has a deductible, compensation is paid for the part above it; the exact amount becomes known after the insurer's calculation.

Yes, this is exactly one of the most important parts of the policy. The first page of the policy says what is insured, while the exclusions section says in which cases the insurer will not pay. Disputes over compensation often arise from this very section.

When reading the exclusions, it is convenient to group them. The checklist I recommend consists of five questions:

1. Which causes are not covered? It matters which event caused the loss: a sudden event and a gradual process may be treated differently in the policy.
2. Which property is not covered? Check separately what your policy says about cash, documents and property in open areas.
3. In what situations does the policy "fall asleep"? Look for what happens if the building stands empty for a long time or the alarm is switched off.
4. What obligations are required of you? If the policy requires an alarm, a fire extinguisher or storing goods above the floor and this is not met, compensation may be reduced or refused.
5. Which types of loss are not covered? Even if the property is covered, profit lost because of a business stoppage may not be included in the policy.

Example (prepared by the author). After reading its policy, the "Shirin non" café made the following table. The third column contains questions to be put to the insurer in writing:

Practical tips:

1. Rely on the text of the policy, not on the agent's verbal promise. Get important answers in writing.
2. If a risk that matters to you falls under an exclusion, ask whether it can be added to the policy with an extra condition and compare the price.
3. When comparing offers from several insurers, look not only at the premium but also at the list of exclusions: a cheap policy is often cheap because of more exclusions.

Choosing on the annual premium alone can be a mistake. The real price of insurance is the premium plus the part you bear yourself when a loss occurs (deductible, amounts above the limit, exclusions). Besides, the insurer must actually be able to pay, and on time, when a loss occurs.

Example (prepared by the author, hypothetical figures). The "Nur savdo" shop received three offers. Based on the shop's experience, there is roughly one small incident a year, with a loss of around 6 million soums (a broken display window, a water leak).

Offer B looks the cheapest, but because of the 10 million soum deductible, the usual 6 million soum loss stays entirely with the shop. As a result, B turns out the most expensive. A and C are almost equal, and now they need to be compared on other criteria.

Things to check besides price:

1. Scope of cover: which risks are included and which are excluded. A cheap offer may be cheap because of narrow cover.
2. Limits: do the limits for the whole policy and for individual types of property (goods, equipment, cash) match your values?
3. Financial stability: check the insurer's published financial statements, its capital and that it has a licence to operate.
4. Payment practice: ask acquaintances, partners and other entrepreneurs how it paid when a loss occurred: did it pay on time and without unjustified refusals?
5. Service: how quickly is the loss assessed, how clearly are the document requirements written, does it have a representative in your region?

Practical tip: put the offers into one table and compare each by "premium + your expected own share". Then choose among the two or three with similar prices on the basis of reliability. Choosing an insurer that cannot pay in order to save a few hundred thousand soums defeats the whole purpose of insurance.

This situation is called subrogation: once the insurer has paid compensation, the right to recover from the party at fault passes to the insurer up to the amount paid. The logic is simple: you should not get paid twice for one loss (by both the insurer and the party at fault), and the party at fault should not escape liability just because there is insurance.

So for the part covered by the insurer, it is now the insurer, not you, who claims from the transport company. But if the compensation did not fully cover the loss, the claim for the uncovered part usually stays with you.

Example (prepared by the author, hypothetical figures). The loss at the "Bo'ston ulgurji" warehouse (wall and goods) was assessed at 48 million soums. The policy has an unconditional deductible of 3 million soums.

What to watch out for:

1. Do not agree with the party at fault that "we forgive you" without telling the insurer, and do not sign a paper waiving the claim. This affects the insurer's ability to recover; the consequences may be set out in the policy and the law, so agree with the insurer first.
2. Keep all evidence of the incident, including the photos you took and the damaged parts. They will be needed both by the insurer and for your 3 million claim.
3. If the loss exceeds the sum insured, you also go to the party at fault yourself for the uncovered difference.

The exact procedure (how the claim is made, which documents are needed) is written in the policy conditions: read that section before receiving compensation.

To compare the two properly, you first need to understand what endowment life insurance consists of. Each year's premium is split into three parts:

• the risk part — the price of the protection paid to the family if the insured person dies during the term;
• the insurer's expenses — the agent's commission, administration;
• the savings part — money that is returned at the end of the term and on which income is credited.

A deposit only has savings, no protection. So the right comparison is not "is 75 million a lot or a little" but the "protection + savings" package versus "separate protection + deposit".

Example (prepared by the author, hypothetical figures). 6 million soums is paid at the start of each year, for 10 years.

The policy's internal return: paying 60 million and getting 75 million after 10 years equals about 4.0% a year. The third row has both protection and more money at the end. In this example the package turned out more expensive.

But the decision is not made on figures alone:

1. Discipline. It is easy to withdraw a deposit at any time and spend it. A policy is like compulsory saving; for someone who finds self-control hard, that can be useful.
2. Early exit. If the policy is cancelled early, the amount returned may be less than the premiums paid. Ask for the contract's table of surrender values by year and review it.
3. Guaranteed and non-guaranteed part. Find out how much of the 75 million is firmly written into the contract and how much is "expected income".
4. Inflation. 75 million in 10 years is not today's 75 million: estimate what it will be worth in today's prices.

When talking to the agent, ask for three figures in writing: the annual risk part, the share of expenses and the guaranteed amount. Then you can build the table above with your own figures.

Both approaches have drawbacks:

• if you insure for the highest stock (400 million), for most months of the year there is much less stock in the warehouse, yet the premium is paid for 400 million;
• if you insure for the average, the premium is cheaper, but if a loss happens exactly in the season when stock is high, the sum insured may not be enough.

Example (prepared by the author, hypothetical figures). Month-end stock at the "Sharq mevalari" warehouse, million soums: 80, 90, 120, 180, 260, 340, 400, 380, 260, 160, 120, 100. Average: 2,490 : 12 = 207.5 million. Hypothetical annual rate 0.3%.

The reduction in the second row only happens when the policy contains the condition "if the sum insured is less than the actual value, compensation is reduced proportionally". Find this clause in your contract.

Practical routes:

1. Seasonal sum. Some insurers may agree to set different sums insured for different periods of the year: say, a high sum in months 5–8 and a low sum in the other months.
2. A policy with regular stock declarations. The high sum (400 million) is taken as a limit, the company reports the actual stock to the insurer every month, and at the end of the year the premium is recalculated on the actual average stock. Ask your insurer whether such a condition exists.
3. An additional agreement before the season. The main policy is for the average, and a separate additional agreement is made for the months when stock grows.

Whichever is chosen, keep accurate warehouse stock records every month: when a loss occurs, it is exactly these records that prove how much stock was in the warehouse.

These two policies differ in the logic of cover:

• a "named perils" policy — only the risks written in the list are covered; there is no compensation for an event that is not on the list;
• an "all risks" policy — everything is covered except what is written in the list of exclusions.

Do not let the name mislead you: an "all risks" policy also has exclusions. So the main question when comparing is: how likely are events at your warehouse that are not in the first policy's list but are not excluded in the second, and how much loss would they cause?

Another difference shows up in a dispute. In international insurance practice, under a named perils policy the policyholder must show that the loss arose from a risk on the list, while under an all risks policy it is usually the insurer that must show the loss falls under an exclusion. Ask the insurer in writing how this is handled in your policy.

Example (prepared by the author, hypothetical figures). At the "Chust do'ppi" wholesale warehouse, three events not on the first policy's list could occur. We assume these events are not in the second policy's list of exclusions. The probabilities are estimated from past years' experience:

On average, if the first policy is chosen, the company bears about 3.2 million soums of losses a year itself, that is, 6 + 3.2 = 9.2 million in total. The second policy costs 9 million. The difference is small, but the main point is not the average. If we assume the events are independent, the probability that at least one of them happens during the year is 1 − 0.7 × 0.9 × 0.98 ≈ 38%. The worst case is the roof collapse: the probability is small, but can the company cover a 60 million soum loss out of its own pocket? If not, the extra 3 million justifies itself as the price paid for that risk.

Before choosing:

1. Read the second policy's list of exclusions in full and compare each item with the real risks at your warehouse.
2. Read the definition of each risk in the first policy: which situations "flooding" includes is written in the policy itself.
3. Build your own table: depending on the warehouse location, the condition of the roof and the work routine, the probabilities will be different.
4. Check that the deductible and the sum insured are the same in both policies, otherwise the premiums cannot be compared directly.

No. The basic principle of property insurance: compensation does not exceed the actual loss. Insurance is for covering a loss, not for getting rich. If one property is insured against the same risk under two separate policies (double insurance), the two insurers together will not pay more than the loss either.

Usually the loss is shared between the insurers in proportion to the sums insured. The exact procedure is written in the policy conditions.

Example (prepared by the author, hypothetical figures). The building of "Oltinsoy un" LLC is worth 600 million soums. It is insured with insurer A for 600 million and with insurer B for 400 million, 1,000 million in total. The fire loss is 150 million soums.

The company receives 150 million, not 250 million. The fact that a building worth 600 million is insured for 1,000 million in total means that part of the premium was paid for nothing.

What to do:

1. Notify both insurers in writing about the second policy. Check whether your policies contain a condition requiring notice of other insurance: hiding such information can cause problems with compensation.
2. Talk to the bank: often the bank may be satisfied not with a separate policy but with being named as beneficiary under the existing policy. Ask the bank itself which condition it will accept.
3. If two policies remain, make sure the total sum is close to the property's value: say, by reducing one from 600 million to 200 million, you can save on the premium.

Insurance practice has "key person insurance" for this. It is insurance a company takes out on the life or health of the person who matters most to it: the policyholder is the company, the company pays the premium and the payout also goes to the company. Its purpose is not to help the employee's family but to cover the loss the business itself suffers in his absence: the drop in income while a new specialist is found and trained.

Which risks such insurance covers (death, disability) is written separately in each contract. An employee leaving of his own accord, however, is usually not an insured event: that risk is reduced not by insurance but by working conditions and by passing knowledge on to others.

Estimating the sum insured (prepared by the author, hypothetical figures). Say that at "Bek-soft" LLC the clients brought in by the lead programmer generate 150 million soums of annual profit. If he cannot work, finding a replacement and winning the clients back will take 2 years, and finding and training a new specialist will cost another 30 million soums.

It makes sense to ask for a sum insured close to this estimated loss. A much larger sum means paying excess premium, while a smaller one leaves part of the loss uncovered.

Practical tips:

1. Talk openly with the employee and get his written consent: the insurance relies on information about his health.
2. Do not rely on insurance alone: have at least two employees work with key clients and document work processes. This reduces the risk itself.
3. When you receive an offer, ask in writing which events are covered, which are excluded and when the payout is made.
4. Find out in advance with your accountant how the premium is reflected in the accounts and for tax purposes.

If the sum insured is less than the actual value of the property, the payout can be calculated under two different systems. Which one applies is stated in the policy conditions.

1. Proportional system. The payout is the part of the loss equal to the ratio of the sum insured to the actual value: payout = loss × sum insured : actual value. In other words, you bear the loss for the uninsured part of the property yourself.
2. First loss system. The loss is covered in full up to the sum insured, and no ratio is applied. Anything above the sum insured stays with you.

Example (prepared by the author, hypothetical figures). The warehouse of "Bog'ishamol savdo" is worth 500 million soums, the sum insured is 200 million soums, there is no deductible.

As you can see, for partial losses the first loss system covers much more. That is why the insurer sets a different rate for such insurance: it takes into account that the probability of a partial loss is high. It is natural that, for the same sum insured, the premium for a first loss policy differs from that of a proportional policy.

When first loss makes sense:

• the property is large, but only part of it can be damaged at the same time (several separate rooms or buildings, goods kept in different places);
• insuring the full value is expensive and the probability of a total loss is very low.

For the decision: ask the agent in writing for the premium under both systems for the same sum insured, then build a table like the one above using your own most likely loss amounts.

The insurance rate (gross rate) is made up of two parts:

• the net rate — the part that covers the claims the insurer expects to pay. It is calculated from the frequency of events and the average size of the loss;
• the loading — the insurer's operating costs, fees to agents and intermediaries, a reserve for unexpected large losses and profit.

Net rate = probability of an event × average payout : sum insured Gross rate = net rate : (1 − loading share)

Example (prepared by the author, hypothetical figures). The insurer's statistics for 2,000 similar shops: on average an event occurs in 30 of them a year, the average payout is 40 million soums, the average sum insured of the shops is 400 million soums. The loading share is hypothetically 30%.

So roughly 70 percent of the rate goes to future payouts and 30 percent to the insurer's costs and profit.

Why your rate differs from the average: the insurer compares your shop with the average shop. A fire alarm, security and new electrical wiring lower the probability of an event, so the net rate may go down too. Conversely, if you had many losses in previous years, the insurer will rate your frequency higher.

Practical tip: when you receive an offer, state your risk-reduction measures in writing and ask how they affect the rate.

The reason is the law of large numbers and risk pooling. For a single café the outcome is "all or nothing": either the year passes quietly or a big loss occurs. When thousands of similar cafés that do not depend on one another are pooled, the number of events falls within a much narrower range around the average, and the insurer can plan payouts in advance fairly accurately.

Example (prepared by the author, hypothetical figures). The probability of a fire in each café during the year is 1%, and the loss from one fire is 50 million soums. Expected payout per policy: 1% × 50 million = 0.5 million soums.

The standard deviation is calculated with the binomial distribution formula: √(n × p × (1 − p)).

What this means:

• In a small portfolio of 100 cafés, the probability of 3 or more fires is about 7.9%. Then payouts exceed 150 million soums when only 50 million soums was expected, so the year's result depends on chance.
• In a portfolio of 10,000 cafés, the number of events lies between 80 and 120 in about 95% of cases (average ± 2 standard deviations). The payout per policy stays within 0.4–0.6 million soums.

That is why it is enough for the insurer to set the rate slightly above each client's expected loss. For the café, the policy turns an uncertain large risk into a certain, small annual expense.

The limitation: the law only works when events are independent of one another. If a single earthquake or flood damages thousands of clients at once, pooling does not help. Insurers share such risks with others through reinsurance.

Insurance is only one way of dealing with risk. The classic risk management framework distinguishes four approaches:

1. Avoidance — giving up the risky activity altogether (for example, not storing flammable goods at all).
2. Reduction — lowering the probability of an event or the size of the loss (alarms, a suppression system, storing goods in several places).
3. Transfer — shifting the loss to someone else (insurance, allocating liability in a contract).
4. Retention — bearing small losses at your own expense (deductible, reserve money).

In practice they are used together: reduction measures make insurance cheaper, and insurance covers the remaining large risk.

Example (prepared by the author, hypothetical figures). The "Qo'qon gilam" warehouse is worth 600 million soums. The annual premium is currently 7.2 million soums. An automatic suppression system costs 16 million soums, lasts 8 years, and annual maintenance is 0.4 million soums. Say the insurer has confirmed in writing that it will cut the premium to 4.2 million soums if the system is installed.

On money alone, the system saves 0.6 million soums a year. But the main benefit does not show in the table: losses that insurance does not cover also fall — days of downtime, lost customers, the deductible amount, time to restock goods.

One more calculation: if the probability of a fire is hypothetically 2% and the average loss is 300 million, the expected annual loss is 2% × 300 = 6 million soums. If the system cuts the probability to 0.5% and the loss to 100 million, the expected loss becomes 0.5% × 100 = 0.5 million soums.

Practical tip: before spending on risk reduction, get the insurer's discount condition in writing and keep the system's documents (installation certificate, maintenance log), because if an event occurs you will need to prove the system was working.

Even with one policy, the expense is split according to the work each vehicle is used for. Costs related to delivering products to the consumer are recorded in 9410 "Selling expenses" (NAS No. 21, paragraph 407), and management costs in 9420 "Administrative expenses" (paragraph 409). The insurance expense is transferred to the expense accounts through 6510 (paragraph 280, line 2). If the policy did not split the premium by vehicle, you set the allocation base in the accounting policy. The clearest base is the sum insured of each vehicle.

Example (prepared by the author, hypothetical figures). "Ko'kcha savdo" LLC bought a policy with an annual premium of 18,000,000 soums. Sums insured: delivery vehicles 120, 120 and 160 mln soums (400 mln in total), the director's car 200 mln soums. 600 mln soums in all.

If a vehicle is sold or its purpose changes during the year, recalculate the allocation for the remaining months. If there is a vehicle that carries loads inside a workshop, its share goes to general production overhead, i.e. to 2510 (paragraph 130, line 11).

No: wherever an employee works, that is the expense account his insurance goes to. Under paragraph 276 of NAS No. 21, debts for insuring employees, including health insurance, are kept in the accounts of group 6500, in 6510 "Insurance payments". Accrued insurance payments are transferred to expense accounts (paragraph 280, line 2).

Example (prepared by the author, hypothetical figures). "Bekobod tikuv" LLC has 40 employees; under the policy the annual premium per employee is 1,500,000 soums, 60,000,000 soums in total, paid at 5,000,000 soums a month.

Each month: Dt 2010, 2510, 9420, 9410 – Ct 6510, 5,000,000 soums in total. Payment: Dt 6510 – Ct 5110 (paragraph 280, line 3).

Why split it: the workers' insurance of 3,000,000 soums goes into the cost of the sewn products, while the management and sales portions are period expenses and hit the financial result in the same month. If you record everything in 9420, cost will look too low and administrative expenses too high.

Analytical accounting for 6510 is kept for each insurer and each contract (paragraph 279). The tax consequences of such insurance (deductibility of the expense, the employee's income) are checked separately under the Tax Code and are not considered here.

For a one-year policy, 3190 "Other prepaid expenses" is correct: advance payment for annual property insurance is shown in group 3100 (NAS No. 21, paragraph 156). But group 3100 is named "Prepaid expenses – current portion", and it collects expenses relating to future periods for the current portion (paragraph 155). So the part relating to the period after 12 months cannot be shown as a current asset.

For the long-term part, the standard has no separate line relating to insurance. Paragraph 83 says that 0990 "Other long-term deferred expenses" is for deferred expenses not shown in other accounts, and paragraph 165 says that 3290 "Other deferred expenses" is for expenses whose recording in 3100 is not provided for. So set in the accounting policy which account to keep the long-term part of a multi-year policy in and how to transfer it to the current portion.

Example (prepared by the author, hypothetical figures). "Navro'z konsalt" LLC bought a 36-month policy from 1 January; the premium is 36,000,000 soums, i.e. 36,000,000 : 36 = 1,000,000 soums a month. The first 12 months account for 12,000,000 soums, and the remaining 24 months for 24,000,000 soums.

At the end of year 1, out of the long-term part of 24,000,000 soums, the 12,000,000 soums relating to the next 12 months moves to the current portion, and the remaining 12,000,000 soums stays long-term. If you leave everything in 3190, at the start of year 1 current assets will be overstated by 24,000,000 soums, and the current ratio will make the company look better than it really is.

On the cancellation date, 3190 holds the premium for the unused months. It is split into two parts: the amount the insurer returns becomes a receivable, and the part retained under the contract goes to expenses. How the refund is calculated is written in the insurance contract and rules, so read that clause first.

Example (prepared by the author, hypothetical figures). "Ohangaron servis" LLC bought a one-year policy for 24,000,000 soums on 1 January and paid the premium. The policy was cancelled on 1 May. Under the contract, 20 percent of the unused part is retained for the insurer's costs (hypothetical condition).

NAS No. 21 gives no separate entry for cancelling a policy. Under paragraph 215, account 4890 "Other receivables" records current settlements not shown in the accounts above; set in the accounting policy whether to keep the amount refundable by the insurer in this account and which expense account the retained part goes to. Whichever route is chosen, after cancellation no balance for this policy should remain in 3190.

Conclusion: four months of insurance on the building cost the company 8,000,000 + 3,200,000 = 11,200,000 soums. If the sale of the building is known in advance, take the cancellation terms into account before renewing the policy for a new term.

No, they protect different things.

Example (prepared by the author, hypothetical figures). A pipe burst in the kitchen of the "Sitora" cafe, and water flooded the shop on the floor below. The cafe's own kitchen equipment suffered damage of 5,000,000 soums, and the neighbouring shop's goods 7,000,000 soums. If there is only property insurance, under the policy terms the cafe may recover its own 5,000,000-soum loss, but it will pay the neighbour 7,000,000 soums out of its own pocket. If there is also a liability policy, the neighbour's loss is covered within the limit of that policy.

In the accounts both policies are handled in the same way. Paragraph 276 of NAS No. 21 says that both property insurance and civil liability insurance for damage caused to the property interests of third parties are recorded in the accounts of group 6500. The premium is recorded on the credit of 6510, and the expense on the debit of the relevant expense account depending on which activity the insured object serves (paragraph 280, line 2). Analytics for 6510 are kept separately for each contract (paragraph 279), so do not combine the two policies in one line.

Before deciding, ask yourself: "What is the largest loss that could be caused to others through our fault?" If that amount is larger than your monthly profit, give liability insurance serious consideration.

Such an arrangement is called co-insurance (joint insurance). The risk on one item is split among several insurers in shares agreed in advance: each receives the premium and pays the indemnity according to its share. The contract may name one of them as the leader, who handles the paperwork.

The difference from reinsurance: in reinsurance you deal with one insurer, which itself transfers part of the risk to another company, and this is not visible to you. In co-insurance, each insurer's share is written in your contract.

Example (prepared by the author, hypothetical figures). The sum insured of the warehouse of "Qo'rg'ontepa logistika" LLC is 2 billion soums, the annual premium 24 million soums. Company "A" took a 60% share, company "B" 40%. A fire caused a loss of 350 million soums; there is no deductible.

In the accounts the amounts owed to the two companies must not get mixed up: analytical accounting for 6510 "Insurance payments" is kept by insurer and by individual contract (NAS No. 21, paragraph 279). When the premium is charged to expenses, Dt the relevant expense account – Ct 6510 (paragraph 280, line 2), and when paid from the bank, Dt 6510 – Ct 5110 (paragraph 280, line 3), recorded separately for each company.

Tip: before signing, clarify one thing in the contract — if one of the insurers delays its share, is the other liable in its place or not.

It is added to the cost. Paragraph 15 of NAS No. 4 lists the transportation and procurement costs that are included in cost, and among them are "costs of insuring risks during the transportation of inventories". That is, insurance connected with delivering goods to their location is, just like freight, part of the cost of inventory.

Insurance of stock in the warehouse is a different matter: it is not directly connected with the purchase, so it is not included in cost and is an expense of that period (NAS No. 4, paragraph 17).

Example (prepared by the author, hypothetical figures). The "Chinni dunyo" shop bought 4,000 dishes:

Without the insurance, one dish would have come to 12,800 soums. A difference of 100 soums looks small, but since the mark-up is applied to this cost, it also affects pricing.

There are two methods of accounting for transportation and procurement costs (NAS No. 4, paragraph 22): adding them directly to the cost of each batch, or accumulating them separately and then allocating them to inventories. Write into your accounting policy which one is applied. The receipt of goods is recorded with Dt 2910 – Ct 6010 (NAS No. 21, paragraph 154, line 2). The standard's tables give no separate model line for adding the insurance cost to the cost of goods, so set this entry in your accounting policy too.

At first glance the difference is simple: 4 × 3,150,000 = 12,600,000 soums, i.e. 600,000 soums (5%) more. But when you pay in instalments, part of the money stays in your hands for several months, so it should be compared with the cost of credit.

The logic is as follows (calculation prepared by the author). The first quarterly payment of 3.15 million soums is paid at the start under both options. The insurer, as it were, leaves you the remaining 8.85 million soums "on loan", and in return you pay 3 × 3.15 = 9.45 million soums over the next three quarters.

The internal rate is found as follows: when each quarterly payment is discounted to present value at this rate, their sum must equal 8.85 million soums.

Conclusion: if your spare money earns more than 14.1% a year on a deposit, or if you would have to take a loan more expensive than this to find the money, paying in instalments is beneficial. Otherwise paying in one go is cheaper.

In the accounts there is no difference: each payment is recorded as an advance to the insurer with Dt 4510 – Ct 5110 (NAS No. 21, paragraph 195, line 1), and once the insurance payment is charged, the advance is closed with Dt 6510 – Ct 4510 (paragraph 195, line 2). The 600,000 soums is also part of the premium amount in the contract, so it remains part of the insurance expense.

The answer depends on your own loss history. You save exactly 2.5 million soums on the premium every year, but in return you bear a larger part of the loss in each insured event yourself. These two need to be compared.

Example (prepared by the author, hypothetical figures). "Sirdaryo agroservis" LLC has had three events in the last 5 years:

Average additional loss per year: 7,500,000 : 5 = 1,500,000 soums. The premium saved is 2,500,000 soums a year. So if this history repeats, the new option gives a benefit of about 1,000,000 soums a year.

But an average calculation is not enough. If there are two large events in a bad year, an additional 2 × 4 = 8 million soums will have to be paid at once. Therefore:

• if the company has a cash reserve able to pay such an amount, a large deductible is preferable;
• if cash flow is tight, a small deductible gives peace of mind even though it is more expensive;
• in an activity with many small losses, a large deductible may not pay off.

In the accounts, the lower premium reduces expenses: the premium charged is recorded as before with Dt the relevant expense account – Ct 6510 (NAS No. 21, paragraph 280, line 2), only the amount is smaller.

The machine is not added to the policy automatically: an additional agreement must be signed with the insurer and the sum insured increased. Otherwise, if a loss occurs, the new machine may not be covered because it is not in the policy.

The additional premium is often calculated in proportion to the remaining term of the policy, but the exact method is written in the additional agreement, so read it.

Example (prepared by the author, hypothetical figures). "Ohangaron metall" LLC bought a machine worth 300 million soums. The annual rate in the policy is 0.8% of the sum insured, and 6 months remain until the policy expires.

Since the machine works in primary production, its insurance cost is recorded with Dt 2010 "Primary production" – Ct 6510 (NAS No. 21, paragraph 120, line 15). When the additional premium is paid from the bank, Dt 6510 – Ct 5110 (paragraph 280, line 3). If the premium is paid in advance for six months, spread the expense at 200,000 soums a month; do not record it all at once in July.

Tip: if fixed assets keep increasing during the year, check the sum insured at the start of every quarter — the date in the additional agreement determines when the new equipment entered the policy.

It can; it depends on the type of sum insured in the contract.

• Aggregate sum insured: an overall limit for the term of the contract. Each indemnity paid is deducted from the limit, and for the next event payment is made only within the remainder.
• Non-aggregate sum insured: the limit applies to each event separately and does not decrease after payouts.

Example (compiled by the author, hypothetical figures, no deductible assumed for simplicity). The sum insured of the "Nurota sovutgich" warehouse is 50 million soums. Two events occurred during the year: a loss of 20 million soums in March and 35 million soums in September.

Under the aggregate contract, 5 million soums of the September loss remained uncovered, and until the contract expired the property was effectively unprotected.

Tip: read in advance how the type of sum is written in the contract. If it is aggregate, ask the insurer whether the limit can be reinstated after a large payout and on what terms.

No. The essence of property insurance is to compensate the loss suffered, not to enrich the insured. Therefore the indemnity is limited to the actual loss on the property: if the vehicle is worth 150 million soums, the loss will not exceed 150 million soums even if it is completely destroyed. The premium paid for the excess 50 million soums of sum insured is effectively wasted. The exact fate of the contract and the premium for the excess part is determined by legislation and the terms of the contract.

Example (compiled by the author, hypothetical rate of 2%). A truck of "Jizzax logistika":

Difference: 1,000,000 soums a year paid for nothing.

There is also the opposite mistake: if the property rises in value but the sum stays the same, the property ends up insured for less than its value, and the indemnity for partial losses may be reduced.

Tip: review the sum insured every year when renewing the contract, based on the current value of the property. Support the value with a valuer's report or prices of similar property.

The loss ratio shows what part of the premiums collected by the insurer went to indemnities:

Loss ratio = indemnities / earned premiums × 100%.

Earned premium means the premium attributable to the part of the period during which insurance cover was actually provided. If business expenses (agent fees, staff, office) are added to it, a combined ratio is obtained: if it is below 100%, the insurer makes a profit on that type of insurance itself; if it is above, it makes a loss.

Example (compiled by the author, hypothetical figures). One-year results of an insurer for truck insurance:

The combined ratio is 60% + 30% = 90%, i.e. 10 soums remain out of every 100 soums of premium. If next year indemnities rise to 600 million soums, the ratio will be (600 + 240) / 800 = 105%, and the insurer will make a loss. Hence the wish to raise the rate.

The benefit for the client: you understand the reason for the rate increase and can put forward your own arguments in negotiations. For example, if no indemnity has been claimed under your contract for several years, or if you have taken risk-reducing measures (security, GPS), point these out.

A one-year premium is paid for cover throughout the whole year. So it is "earned" gradually as time passes:

• earned portion: relates to the period for which cover has already been provided;
• unearned portion: relates to the period that has not yet come; for the insurer it is an obligation not yet fulfilled.

Example (compiled by the author, hypothetical figures). "Samarqand mebel" insures its administrative building from 1 October 2026 to 30 September 2027 and pays a premium of 9,600,000 soums. Per month: 9,600,000 / 12 = 800,000 soums.

On the policyholder's side (yours), the same split shows up in the accounts. NAS No. 21 (paragraph 156, subparagraph "b") includes the advance payment of annual property insurance among deferred expenses, and paragraph 157 requires them to be transferred to expenses over the set period. Since the building is administrative, in 2026 2,400,000 soums is charged to account 9420 "Administrative expenses" (each month Dt 9420 – Ct 3190, 800,000 soums each; paragraph 161, row 7), while the remaining 7,200,000 soums stays on the balance sheet at year-end as the balance of 3190 "Other prepaid expenses" and becomes an expense of 2027.

Thus, it is not the whole 9.6 million soums but only 2.4 million soums that affects 2026 profit.

Tip: find out in advance what part of the premium is refunded if the contract is terminated early: this procedure is set in the contract.

On average, yes, insurance is not "cheap". But insurance is taken out not for the average year, but for the worst year.

Step one: expected loss = probability of the event × amount of the loss. The insurer adds its own expenses and profit to the expected loss in the premium, so the premium is usually higher than the expected loss.

Step two: assess how hard a single event would hit the business.

Example (compiled by the author, hypothetical figures). The "Urganch duradgor" workshop:

On average the workshop pays 4.5 − 3 = 1.5 million soums a year "extra". But a single fire wipes out 300 / 60 = 5 years of profit. To cover such a loss out of its own funds, it would need 300 million soums in reserve.

Rule: it makes sense to insure a risk with a small probability but consequences that would stop the business. Small, frequent losses (for example, broken windows) the company can bear itself; in such cases a contract with a deductible helps reduce the premium.

Tip: do not make up the probability yourself; rely at least on your own history, your neighbours' experience and the state of fire safety.

No, this is an expense not of January but of the whole year. NAS No. 21 (paragraph 156, sub-paragraph "b") lists the advance payment of annual property insurance among deferred expenses. Under paragraph 160, other prepaid expenses not recorded in 3110 and 3120 are kept in account 3190 "Other prepaid expenses"; set once in your accounting policy which account (3120 or 3190) is used for property insurance. The amount is transferred to expenses in portions as the months pass (paragraph 157).

Entries: when the liability under the contract is recognised, Dt 3190 – Ct 6510 (paragraph 161, row 6: a deferred expense against a liability account); when the money is transferred, Dt 6510 – Ct 5110 (paragraph 226, row 19); each month the relevant share, Dt 9420 – Ct 3190 (paragraph 161, row 7: the share is transferred to expense accounts). If the building relates to production, the monthly share is charged to 2510 instead of 9420.

Example (prepared by the author, hypothetical figures): "Nurafshon mebel" paid an annual premium of 12 000 000 soum for its office building. In January, Dt 3190 – Ct 6510 and Dt 6510 – Ct 5110 for 12 000 000 soum. At the end of each month, Dt 9420 – Ct 3190 1 000 000 soum. At the end of December, the balance in 3190 for this contract drops to zero.

No, the expense is recorded according to where the property it relates to is used. Paragraph 128 of NAS No. 21 (sub-paragraph "g") lists insurance costs for production property as part of general production overhead. In the examples in paragraph 130 this entry is: Dt 2510 – Ct 6510.

The office building, however, does not take part in production, so its insurance is a period expense. The examples in paragraph 280 state that insurance payments accrued are recorded on the debit of "expense accounts" and the credit of 6510; since, under paragraph 409, the costs of managing the organisation are kept in 9420 "Administrative expenses", for the management building this is Dt 9420 – Ct 6510.

Example (prepared by the author, hypothetical figures): each month "Chinor tekstil" accrued 900 000 soum for insurance of the machines and 300 000 soum for insurance of the office. Entries: Dt 2510 – Ct 6510 900 000 and Dt 9420 – Ct 6510 300 000. The first is allocated to the cost of products; the second goes straight to the result for the period.

NAS No. 21 specifies separate accounts for these two units. The boiler house supplies heat and steam to main production: under paragraph 124 (sub-paragraph "a"), the costs of supplying various kinds of energy, including steam, are recorded in 2310 "Auxiliary production". In the examples in paragraph 126, insurance costs in auxiliary production are: Dt 2310 – Ct 6510.

The costs of running canteens and buffets are listed by name in paragraph 133 among service facilities and are kept in 2710. In the examples in paragraph 135, insurance costs in service facilities are: Dt 2710 – Ct 6510. Thus the boiler house's insurance goes into the cost of its heat, and the canteen's into canteen expenses.

Example (prepared by the author, hypothetical figures): in one month "Bekobod metall" accrued 400 000 soum for insurance of the boiler house and 150 000 soum for insurance of the canteen. Entries: Dt 2310 – Ct 6510 400 000; Dt 2710 – Ct 6510 150 000. When paid to the insurer: Dt 6510 – Ct 5110 550 000 (paragraph 226, row 19).

The account credited is the one from which the money left. Money in a letter of credit sits in account 5510 "Letters of credit" (paragraph 231), so 5110 is not touched.

The examples in paragraph 234 of NAS No. 21 cover exactly this case: settlement of insurance debts from letter of credit funds, Dt 6510 – Ct 5510. Analytical records for 5510 are kept separately for each letter of credit, so it should also be clear from which letter of credit the payment was made.

Example (prepared by the author, hypothetical figures): "Zarafshon logistika" had 10 000 000 soum in a letter of credit. A debt of 2 500 000 soum for cargo insurance was paid from this letter of credit: Dt 6510 – Ct 5510 2 500 000. Check against the bank statement that the letter of credit balance has fallen to 7 500 000 soum.

A deductible is the part of a loss agreed in the contract that the insurer does not cover and the policyholder bears itself. It avoids unnecessary hassle over small losses and usually also reduces the premium.

There are two kinds of deductible. With a conditional deductible, if the loss does not exceed the deductible, no compensation is paid; if it does, the loss is covered in full. With an unconditional deductible, the deductible amount is subtracted from any compensation. Be sure to check which kind is written in your contract.

Example (prepared by the author, hypothetical figures): the deductible of the "Lola gullari" shop is 2 000 000 soum. If the loss from a broken shop window is 1 500 000 soum, there is no compensation under either kind. If the loss is 5 000 000 soum: with a conditional deductible, compensation is 5 000 000; with an unconditional deductible, 5 000 000 − 2 000 000 = 3 000 000 soum.

The difference is in time. An insurance risk is an event that has not yet happened but may happen, for example, the possibility of a fire. Insurance sells protection precisely against this possibility. An insured event, by contrast, is the actual occurrence of the event specified in the contract, and it is this that raises the question of paying compensation.

For there to be a risk, the event must be random: something that is certain to happen or is done deliberately is not insured. That is why it is important to state clearly in the contract which risks are covered and which are excluded.

Example (prepared by the author): the "Shirin tandir" bakery is insured against fire and flood risks. One night a pipe burst and the sacks of flour got wet: this is an insured event under the flood risk. Had there been a theft that night, it would not have been an insured event, because that risk was not included in the contract.

It depends on the contract. Many property insurance contracts contain a proportional liability clause: if the property is insured for less than its value, compensation is reduced in the same proportion. That is, if the sum insured is half the value of the property, roughly half of any loss is covered.

Other contracts may contain a "first loss" clause: under it, the loss is covered in full up to the sum insured. Which system applies is written in the contract, so you should read that clause before reducing the premium.

Example (prepared by the author, hypothetical figures): the "Sirdaryo don" warehouse is worth 400 mln soum, and the sum insured is 200 mln soum. The fire loss is 80 mln soum. Under the proportional system, compensation is 80 × 200 / 400 = 40 mln soum, and the company bears the remaining 40 mln soum itself. With a "first loss" clause, compensation would be 80 mln soum.

The insurer is the organisation that provides the insurance service, receives the premium and undertakes to pay compensation when an insured event occurs. The policyholder is the person or company that concludes the contract and pays the premium.

The beneficiary is the person who receives the compensation when an insured event occurs. Often this is the policyholder itself, but another person may also be named in the contract. That is why the questions "who pays" and "who receives" must be checked separately.

Example (prepared by the author): "Bahor savdo" LLC insured a truck pledged as collateral for a bank loan. "Bahor savdo" pays the premium, so it is the policyholder. The contract states that if the truck is lost, compensation is paid to the bank that granted the loan: in this case the beneficiary is the bank.

Yes. Reinsurance is the transfer by an insurer of part of the risk it has accepted to another insurer (a reinsurer). In return, it gives the reinsurer the corresponding share of the premium. Nothing changes for the client: the insurer that concluded the contract with it remains liable.

The purpose of reinsurance is to prevent one large event from derailing the insurer's financial position. Thanks to it, an insurer can also accept objects for insurance that are beyond its own capacity.

Example (prepared by the author, hypothetical figures): insurer "A" insured a large hotel for 10 bln soum but retained only 3 bln soum of the risk. It ceded the remaining 7 bln soum (70%) to a reinsurer. In the event of a 2 bln soum loss, "A" pays the hotel 2 bln soum and then, under the contract, recovers 70%, that is, 1.4 bln soum, from the reinsurer.

The premium is the "price" of the risk the insurer takes on. It is usually affected by the following: how large the sum insured is; the probability of the risk (the condition of the building, safety measures); the insurance period; the number of risks covered; and whether there is a deductible and how large it is.

That is why it is natural for two similar cafés to pay different premiums. When comparing prices, look not only at the amount but also at what is covered: a cheap policy sometimes covers fewer risks.

Example (prepared by the author): "Choyxona Navro'z" and "Kafe Ra'no" are insured for the same amount. "Kafe Ra'no" has a fire alarm, its contract also has a deductible, and only the fire risk is covered. "Navro'z", on the other hand, is insured against fire, flood and theft with no deductible. It is to be expected that "Navro'z" pays a higher premium, because its protection is broader.

Under paragraph 193 of NAS No. 21, advances paid for insurance are recorded in account 4510 "Advance payments for insurance". When the advance is transferred: Dt 4510 – Ct 5110.

When the insurance payment is accrued, the liability is recorded on the credit of 6510 "Insurance payments" (from the debit of an expense account). In the final settlement, the advance is offset against this liability: Dt 6510 – Ct 4510 (examples in paragraph 195).

Example: in February "Qoraqum transport" transferred a 4 000 000 soum advance to the insurer: Dt 4510 – Ct 5110. In March an insurance payment of 4 000 000 soum was accrued for the administrative building: Dt 9420 – Ct 6510. Then Dt 6510 – Ct 4510. As a result, both 4510 and 6510 come down to zero.

Losses from a natural disaster are accumulated in the extraordinary events account. Under NAS No. 21 (examples in paragraph 104), materials lost in a natural disaster: Dt 9720 "Losses from extraordinary events" – Ct 1010. Contractor services for dealing with the consequences of the disaster are also charged to this account: Dt 9720 – Ct 6010 (examples in paragraph 257).

The insurance indemnity does not reduce the loss; it is recognized separately as income. In the examples in paragraph 405 of NAS No. 21, a payment received from an insurance organization under property insurance is shown on the credit of 9390 "Other operating income". In this way both the loss and the indemnity are visible in the statements.

Example: materials worth 25 000 000 soum in the "Chirchiq qurilish" warehouse were destroyed: Dt 9720 – Ct 1010. A commission report is drawn up and a claim is filed with the insurer. The indemnity amount is recorded separately once it is determined by the insurer's decision.

NAS No. 21 gives a specific entry for this case: the liability for insurance payments related to capital investments is recorded as Dt 0810–0890 – Ct 6510 (examples in paragraphs 75 and 280). For construction in progress this is Dt 0810 "Construction in progress" – Ct 6510.

In other words, this cost is included in the cost of construction. When the workshop is put into service, it moves to 0100 as part of the initial cost (Dt 0120 – Ct 0810) and then becomes an expense through depreciation. Insurance after the workshop starts operating is recorded in ordinary expense accounts.

Example: "Andijon charm" took out an insurance contract worth 6 000 000 soum for the construction period of its workshop: Dt 0810 – Ct 6510, and on payment Dt 6510 – Ct 5110. Once the workshop starts operating, the following year's insurance is recorded with Dt 2510 – Ct 6510.

No, they are three different things:

1. Insurance premium: the fee the policyholder pays the insurer for cover. In the accounts, it is this amount that becomes an expense.
2. Sum insured: the limit of the insurer's liability stated in the contract.
3. Insurance indemnity: the money the insurer pays under the terms of the contract when an insured event occurs.

Example: "Farg'ona meva" insures its refrigerated warehouse for a sum insured of 500 mln soum and pays a premium of 5 mln soum a year. A fire caused a loss of 120 mln soum. The indemnity is calculated according to the amount of the loss and the terms of the contract, and it does not exceed the sum insured. Before signing a contract, be sure to read which events are covered and in which cases no indemnity is paid.

NAS No. 21 says this directly: sub-ledger accounting for the 6500 accounts is kept by insurer and by individual insurance contract (paragraph 279). In other words, a single overall balance on 6510 is not enough; a separate line is needed for each insurer and each contract.

Under paragraph 277, 6510 is used for liabilities for insuring the organization's property and employees. So property insurance and employee insurance should also appear in the sub-ledger as separate contracts.

Example: at "Yangiyer avto", 6510 shows a total credit balance of 9 mln soum. In the sub-ledger: insurer A, vehicle contract 5 mln; insurer B, building contract 4 mln; nothing owed to insurer C. If a reconciliation statement is drawn up with the insurers every month, it is immediately clear under which contract a liability remains.