Consequential Loss (Fire) Insurance Policy
The policy operates in the event of Damage to the property of the Insured due to any peril covered under Standard Fire and Special Perils Policy causing interruption to the business.
This policy compensates
- Loss of Gross Profit due to a reduction in turnover.
- Increased cost of working incurred in minimising that loss of Gross Profit.
- The basis of sum insured is the annual net profit of the business as per previous year’s accounts plus the fixed expenses.
- Gross Profit means the sum of net profit and standing charges.
- Net Profit is the net trading profit excluding capital receipts, accretions and outlay chargeable to capital after making provisions for all standing charges.
- Standing Charges mean all expenses which do not diminish proportionately with a reduction In turnover.
The policy does not cover
- Excess under material damage policy.
- All exclusions under Standard Fire and Special Perils Policy.
- Inventory shortage.
- Loss of goodwill.
- Loss of market.
- War and Nuclear perils.