The Standard Fire Policy covers damage caused by fire and lightning.
The basic fire policy can be extended to include a number of additional risks known as ‘special perils’ or ‘allied perils’ or ‘extraneous perils’. These include: riot and strike damage, malicious damage, atmospheric disturbance (including flood damage), earthquake fire and shock, explosion, impact damage, aircraft damage.
The property insured normally includes residential /commercial buildings, industries, stock and stock in process, fixtures and fittings, plant and machinery etc.
Business interruption / Loss of Profits Insurance
The Fire policy mentioned above indemnifies loss of property damaged or destroyed, but not the losses caused by reduced turnover and increase in cost of working during the closer of business or repair period and thereafter.
These losses come about because:
- Certain overhead costs will remain at their full level, even though sales are reduced; Net profit will be reduced;
- There may be increased costs incurred to keep the business going in a temporary manner / in an alternate premises.
The Loss of Profits/Business Interruption policy would cover loss of gross profit (net profit plus standing charges) following loss or damage due to fire and special/allied perils.