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
- His Loss of Gross Profit due to
a reduction in turnover
- Increased Cost of Working incurred
in minimising that loss of Gross
Profit
Definitions
Gross Profit is the sum of Net Profit
and Insured 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 but prior to deduction of
tax.
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.
Rating
The Basis Rate shall be the Average
Fire Rate of the items covering the
contents of the process blocks of
the business premises occupied by
the insured. |
