Business Interruption Insurance (Fire Loss of Profit Insurance i.e. FLOP Insurance)

It covers loss of gross profit, increased cost of working, and reduction in turnover due to business interruption.

It covers losses caused by perils specified in the fire policy, which may include natural disasters like fire, but not all natural disasters unless specifically included.

Common exclusions include losses due to war, terrorism, governmental actions, and deliberate acts by the insured.

The indemnity period is the duration beginning with the occurrence of damage and ending when the business operations return to normal, up to the maximum period specified in the policy.

Yes, the policy can be tailored to meet the specific needs of different industries by adjusting coverage limits and including relevant add-ons.

Required documentation includes profit and loss statements, balance sheets, tax returns, evidence of additional expenses, and possibly auditor reports.

Gross profit is a key component in calculating the loss of income during the business interruption period.

Depending on the policy, wages of employees who are not able to work due to the interruption may be covered.

Losses resulting from the enforcement of building codes are typically excluded from coverage.

Yes, loss of profits due to spoilage can be covered by extending the policy with a spoilage risk endorsement.

The sum insured shall stand reduced by the amount of the loss if the insured does not opt to reinstate it immediately after the loss.

Contingent business interruption covers income loss due to damage to the property of suppliers or customers affecting the insured’s operations.

Losses due to computer system failures are typically excluded unless caused by covered perils.

The alternative basis clause allows for the term ‘Output’ to be substituted for ‘Turnover’ when calculating losses, with specific conditions applied.

Yes, the policy can cover professional fees for restoring business records if included in the coverage.

Losses caused by vandalism or civil commotion are typically excluded from coverage.

Loss of market is usually excluded from the coverage.

The annual turnover helps determine the sum insured and the basis for calculating losses during the indemnity period.

Yes, with an appropriate endorsement, the policy can cover losses due to damage at a customer’s premises.

The sum insured for professional fees can be adjusted based on the gross fees earned during the indemnity period.

The policy covers increased costs of working to avoid or reduce the loss of gross profit during the indemnity period.

Yes, special conditions apply for add-on covers such as earthquake damage, which must be explicitly endorsed in the policy.

The insured may receive a pro-rata premium refund if the gross profit earned is less than the sum insured, provided no claims have been made.

The insured should notify the insurer, document the damage, and take practical steps to minimize the interruption and prepare necessary documentation for the claim.

Yes, legal and clerical charges for restoring documents can be covered if included in the policy.

If services are rendered elsewhere during the indemnity period, the revenue from these services must be accounted for in calculating the gross fees.

Yes, the policy can cover additional expenses related to temporary relocation of the business.

The co-insurance clause outlines that the policy is shared among multiple insurers, and each insurer’s liability is limited to their respective share.

Losses due to data corruption or loss are generally excluded unless caused by a covered peril.

Property insurance covers physical damage to the business premises and assets, while Business Interruption Insurance (Fire Loss of Profit Insurance i.e. FLOP Insurance) covers the loss of income and additional expenses incurred due to the interruption of business operations.

The indemnity period is the duration for which the insurer will cover the loss of income and additional expenses. It typically starts from the date of the damage and continues until the business returns to its normal operations, up to the maximum period specified in the policy.

No, Business Interruption Insurance (Fire Loss of Profit Insurance i.e. FLOP Insurance) covers only the losses incurred during the indemnity period. Future losses that occur after the indemnity period are not covered.

Increased cost of working is generally covered, provided the additional expenses are necessary and incurred to minimize the reduction in turnover and continue business operations during the indemnity period.

To make a claim, businesses typically need to provide detailed financial records, including profit and loss statements, turnover records, and evidence of additional expenses incurred. Insurers may also require reports from auditors or accountants.