What is Loss of the Profit Policy? And What Damages Covered Under this Policy

What is Loss of Profit Policy?

Risks like Storm, Fire, Flood or man-made disasters like Strike, Riots, and Malicious Damage are insured by the ‘Fire Standard & Special Perils’ Plan. But as a result of such disasters,  your company may have to cease its usual commercial activities, resulting in a decrease in your revenue, or you may be required to invest certain extra expenditures in order to continue the regular function of your business. Loss of Profit Insurance covers these losses that you suffer as a result of fire damage resulting in suspension of operations or increased expenses due to Fire loss.

Coverage of Fire Loss of Profit policy

It’s a common misconception that the only type of insurance you need for your business is liability coverage. While this is important, it doesn’t protect against all risks. You may be subject to a loss of profits due to fire damage or another covered peril and not have any protection. If you’re looking for an affordable way to ensure your company stays afloat in the event of a disaster, it is important to get a Fire Loss of Profit policy. The coverage includes:

• Deficit of Net Trading Profit
• Loss of Wages
• Standing Charges
• Increased Working Cost
• Fees of an Auditor

General Exclusions

You’ve taken the time to get your Fire Loss of Profit policy plan in place, but have you read all of the fine print? There are a few general exclusions under these plans that could leave you with some unexpected costs. Here is a list of popular exclusions for this type of business insurance policy:

• Deficit of Gross Profit
• Difference between Stock Value before fire and replacement
• After-fire degradation of surviving stock
• Goodwill loss
• Claims of third-parties