Fire Consequential Loss

This class of insurance is also called Loss of Profit or Business Interruption Insurance.

While fire insurance indemnifies the material loss as a result of a fire damage, the insured may still stand to lose because his business is interrupted. He still has to continue to pay bank interest, utilities, rent, etc. which are fixed in nature. These expenditures are also called Standing charges. In addition, the insured may suffer a reduction in his production and turnover or income. He too will lose his net profit.

Thus, this policy is designed to pay all the Standing Charges and Gross Profit in the event of a fire damage/loss.

A standard consequential loss insurance policy insurers against loss of :

• the Gross Profit
• the Wages
• the Accountant’s Charges

resulting from fire damage. The Policy can also, like the fire policy, be extended to cover full perils with an additional premium.