Fire Loss of Profit (FLOP) is also called as Business Interruption (BI) Insurance cover or consequential loss (fire) policy :
- Fire Loss of Profit (FLOP) policy covers Loss of Gross Profit and/or increase in cost of working due to reduction in turnover/output due to operation of peril covered in the Standard Fire & Special Perils Policy (SFSP).
- Fire Loss of Profit cover would become operative only when there is a Material damage loss in Standard Fire & Special Perils Policy (SFSP) is payable due to covered perils like Fire, Lightning, Riot & Strike Malicious damage, Storm, Tempest, Flood, Inundation
- To claim under Business Interruption (BI) there should be an admissible claim under Fire policy
What is covered?
- Gross Profit (GP) = Net Profit (NP) + Fixed costs (standing charges)
- Increased cost of working
Add on covers available
- Various additional covers like Suppliers Premises, Customer Premises, Failure of Public utility of power / gas/water supply are also available as per requirement and on payment of additional premium.
Rating depends on:
- Annual gross profit
- Annual turnover
- Business Interruption Sum Insured
- Indemnity Period ( For e.g 6,9,12,15 months)
- Rating depends on:
Excess / Deductable
- Policy excess for this policy will be Time excess and will be mentioned as no of days for example 7 days, which will be the deductible under the policy
- War, invasion, Act of foreign enemy, Hostilities or Warlike Operations (whether war be declared or not), Civil War, Mutiny, Civil Commotion assuming the proportion of or amounting to a popular rising, military rising, insurrection, rebellion, revolution, & military usurped power.
- Nuclear power reactions and Radiations.
Any other information
- Good accounting process is a requirement.
- Please go through the policy terms and conditions of the Insurance Company.