Business Interruption or Loss of Profits Policy

Business Interruption or Loss of Profits Policy

This policy is to take care of business loss resulting from accidental loss or damage to property covered

  • Loss/Damage to property often results in partial or full cessation of work
  • Loss of Gross profits due to reduction in Turnover/Output that could not be achieved during the period of interruption due to accidental loss or damage to property is covered under this policy
  • It is a financial loss as a result of physical loss or damage. This policy envisages to cover this financial loss
  • Loss is measured in terms of reduction in Gross Profit (Net profit + Standing Charges) or, Increased Cost Of Working (ICOW) incurred to maintain the pre – loss Turnover/Output
  • Interruption period (Indemnity period) starts from the day of accident and lasts for so many days as mentioned in the policy
  • Indemnity period is chosen by the Insured based on maximum time that may be required for restarting the ceased operations after a major accident and resultant damage to property (machinery)
  • Sum Insured: Estimated Gross profit for the indemnity period chosen by the Insured.
  • This policy is given only in conjunction with material damage policy (Fire or Machinery Breakdown policy)
  • Fire Loss of Profits cover is in built in Industrial All Risk (IAR) policy
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