Bussiness Interuption Insurance
A policy that provides protection against loss of profits in business due to an interruption in business consequent upon an insured peril and claim admitted under the material damage policy.
The sums insured could be arrived at using the following methods
(a) Additions basis -Gross profit = Standing Charges + Net Profit
(b) Difference basis -Gross Profit = (Turnover + Closing Stocks) - (Opening Stocks +Uninsured Working Expenses)
(b) Difference basis -Gross Profit = (Turnover + Closing Stocks) - (Opening Stocks +Uninsured Working Expenses)
What it covers
- Loss of Gross Profit or Revenue due to Reduction in Turnover or Out put
- Increase in cost of working - The additional expenditure incurred for the purpose of avoiding or diminishing the Reduction in Turnover or Out put
Major exclusions
- Political risks exclusions
- Radioactive exclusions
- Pollution/contamination exclusions
