Consequential Loss Policy


This insurance is popularly known as “Loss of Profits” or “Business Interruption Insurance.” It has to be taken in conjunction with a Fire Insurance Policy. For example, if the buildings used for production are destroyed or damaged by fire or by any of the insured perils under the relevant fire policy, the resultant interruption to business may cause a disastrous trading loss which an ordinary fire policy does not cover.



The Consequential Loss Policy is designed to provide indemnity against trading losses as follows:-

Continuing overhead expenses which have to be met out of reduce earnings.
  1. Net profit lost due to a reduction in the volume of trading
  2. Wages of key employees although not gainfully employed during the interruption period, but whose services have to be retained until business returns to normal; also wages in lieu of notice or redundancy payment to employees whose services are no longer required
  3. Additional working expense reasonably incurred in order to overcome or minimize the effect of the damage upon the premises
  4. Standing charges (such as rent, taxes and interest on loans) which continue to be payable by your business to the extent they are no longer earned by the residual trading

Information required to obtain a quote:
  • Total Limit of Indemnity which may include:
    1. Gross Profit
    2. Wages
    3. Auditors’ Fees
  • The period of Indemnity