As a result of a loss due to the risk of fire and damages, entrepreneurs often suffer financial losses due to loss of gross profits on account of reduction in turn over, in addition to increased cost of working during the interruption period.
Besides the business coming to a halt, there are certain standing charges (fixed expenses) such as bank interests, employee's salaries, rent, and electricity, which will continue to be incurred irrespective of the situation that the insured is placed in.
The above expenses can be covered by a Business Interruption Insurance policy.
In order for a “Business Interruption cover” to operate, it is compulsory to have a Property All Risks or Fire Insurance Policy.
This cover takes into consideration the following aspects which should be addressed when opting for this cover:
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GROSS PROFIT |
The sum produced by adding standing charges to the net profit
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NET PROFIT |
The Net Trading Profit (exclusive of all Capital receipts and accretions and all outlay properly chargeable to Capital) resulting from the business of the Insured at the premises after due provision has been made for all standing and other charges including depreciation. |
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STANDING CHARGES |
Interest, Rent, Bank Charges, Insurance Premium, Advertising, Printing, Stationery, Electricity, Travelling Expenses, Maintenance of Plant and Machinery, Depreciation of Building, Plant and Motor Vehicles etc. |
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TURNOVER |
The money paid or payable to the entrepreneurs for goods sold and delivered, and for services rendered in the course of the business at the premises during a financial year. |
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PERIOD OF INDEMNITY |
Whilst the period of insurance is 12 months, the indemnity period differs. This would depend on the period the insured would need to prepare to come back to the position they were in before the loss in terms of both property and trading.
Routinely, the periods would be anything between six to eighteen months. |
Period of Insurance
The coverage is usually provided for a period of one year.
Deductible
The policy always has a time deductible applicable to each and every loss.
Premium rate
Premium rates are based on:
- Limit of indemnity
- Period of indemnity
- Policy deductible
- Type of occupancy
- Physical features of the risk
- Values at risk
- Nature of risk
- Location
- Management and housekeeping
Important Information
Please note that for the easy understanding of the insurance policy, we have highlighted the important aspects. We will be glad to receive your queries and discuss the full set of policy terms, conditions and exclusions.
For more information, please contact Nasco Gulf at +971 4 351 8610.
Claims settlement
The settlement would be based on the Indemnity amount payable by the insurers, which will take into account:
- Reduction in Turnover
- Increase in cost of working
You must alert us of any accident that may lead to a claim covered under the policy, and our team of experts will assist you in the quick settlement of the claim.
Call us as soon as possible, in case of an accident, and our team of experts will guide you through the claim process. For more information, please contact Nasco Gulf at +971 4 351 8610