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This policy operates in the event of damage to the premises of an insured due to any peril insured under the Standard Fire & Special Perils Policy, causing an interruption to his business
Scope of cover:
This policy operates in the event of damage to the premises of an insured due to any peril insured under the Standard Fire & Special Perils Policy, causing an interruption to his business. It enables the insured to recover:
1) His Loss of Gross Profit due to a reduction in turnover
2) Increased Cost of Working incurred in minimizing that loss of Gross Profit.
Definitions
Gross Profit is the sum of Net Profit and Insured Standing Charges.
Net Profit
Net Profit is the 'Net Trading Profit' excluding capital receipts, accretions and outlay chargeable to capital after making provisions for all standing charges but prior to deduction of tax.
Standing Charges
Standing Charges are expenses which do not diminish proportionately with a reduction in turnover. Indemnity Period commences with the date of the damage, and lasts till such time as the business is restored to its pre-damage level, or the period stipulated in the policy, whichever is earlier. This policy insures earnings of the business lost during the Indemnity Period.
Basis of Sum Insured
This is based on the annual net profit of the business as per the previous year's accounts plus the 'standing charges'. An Insured is entitled to return of premium (not exceeding 50% of the premium paid) in case the Gross Profit earned during the financial year concurrent with the period of insurance is less than the Sum Insured.
Extensions:
Loss of Wages
Lay off & retrenchment
Auditors/Accountants Fees
Loss of Goods Lying at Suppliers Premises
Loss due to accidental failure of public electricity/gas/water supply.
Specific Exclusions Same as excluded in the Standard Fire and Special Perils Policy
