Fire Consequential Loss Insurance
Whilst the material damage Fire Policy provides
protection and compensation to an Insured against
physical loss or damage to the property, it does not
provide any protection against the "after effects"
of such loss; namely, the loss or reduction of the
ability of the Insured to maintain business at its
pre-damage level due to the fact that his buildings
and/or machinery have been lost or damaged, thus
restricting or possibly halting the operations of
the company.
Cover
The Fire Consequential Loss policy covers loss
of Gross Profit following an indemnifiable peril
(the perils usually follow that of the Fire policy)
and is measured on the reduction in turnover
compared to the same period in the last twelve
months and applying the Rate of Gross Profit. Cover
also extends to include Additional Expenditure
reasonably incurred to minimise the loss of Gross
Profit. The costs of non productive wages can be
included either as treating them as a standing
charge, or taking out more specific covers such as
Dual Wages. Professional accountants' charges to
produce certified details for the Insured's
presentation of a claim could be included.
Interest Insured
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Gross Profit |
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Wages/ Salaries |
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Rental |
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Auditors' Fees |
Indemnity Period
The indemnity period is the maximum period
during which the policy is to provide an
indemnity following any damage and is selected
by the policyholder. It should be sufficient to
allow for the premises to be rebuilt and
re-equipped and for the premises to be restored
fully to normal conditions in every way. The
indemnity period of 6 months, 12 months, 18
months, and 24 months or higher can be selected.
Information Required
for Quotation
Rate applicable on Fire Consequential Loss
follows rate of the Fire Insurance
Sum Insured of interest insured and the
indemnity period selected are the major factors
affecting premium costs
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