Common use of Loss of Profits Insurance Clause in Contracts

Loss of Profits Insurance. Several types of cover exist; Gross Profit basis (usual for manufacturers, retailers etc); Gross Revenue basis (normally for consultants, professions); and Increased cost of working basis, for businesses that believe there would be no loss of profit or revenue in the event of a claim, but would need to cover increased trading costs until the claim is settled. ‘Accounting Gross Profit’ and ‘Insurance Gross Profit’ are not the same thing. Where your policy includes this cover, the Sum Insured for ‘Gross Profit’ should normally be calculated using the following method: Annual turnover plus year-end stock and work in progress; less opening stock (and work in progress) and purchases, bad debts and uninsured variable expenses (such as the purchase of raw materials or shipping costs) Gross Revenue insures the total turnover without deductions and Increased Cost of Working is based on projected additional costs of temporary relocation and other forecast additional costs. Business interruption sums insured should then be adjusted to take into account the indemnity period (eg. doubled for 2 years indemnity period) Average In the event of under-insurance, Insurers may reduce the amount of any claim settlement in the same proportion as the sum insured bears to the total value of the insured items.

Loss of Profits Insurance. Several types of cover exist; Gross Profit basis (usual for manufacturers, retailers etc); Gross Revenue basis (normally for consultants, professions); and Increased cost of working basis, for businesses that believe there would be no loss of profit or revenue in the event of a claim, but would need to cover increased trading costs until the claim is settled. ‘Accounting Gross Profit’ and ‘Insurance Gross Profit’ are not the same thing. Where your policy includes this cover, the Sum Insured for ‘Gross Profit’ should normally be calculated using the following method: Annual turnover plus year-end stock and work in progress; less opening stock (and work in progress) and purchases, bad debts and uninsured variable expenses (such as the purchase of raw materials or shipping costs) Gross Revenue insures the total turnover without deductions and Increased Cost of Working is based on projected additional costs of temporary relocation and other forecast additional costs. Business interruption sums insured should then be adjusted to take into account the indemnity period (eg. e.g. doubled for 2 years indemnity period) Average In the event of under-insurance, Insurers may reduce the amount of any claim settlement in the same proportion as the sum insured bears to the total value of the insured items.)

Loss of Profits Insurance. Several types of cover exist; Gross Profit basis (usual for manufacturers, retailers etc); Gross Revenue basis (normally for consultants, professions); and Increased cost of working basis, for businesses that believe there would be no loss of profit or revenue in the event of a claim, claim but would need to cover increased trading costs until the claim is settled. ‘Accounting Gross Profit’ and ‘Insurance Gross Profit’ are not the same thing. Where your Your policy includes this cover, the Sum Insured for ‘Gross Profit’ should normally be calculated using the following method: Annual turnover plus year-end stock and work in progress; less opening stock (and work in progress) and purchases, bad debts and uninsured variable expenses (such as the purchase of raw materials or shipping costs) Gross Revenue insures the total turnover without deductions and Increased Cost of Working is based on projected additional costs of temporary relocation and other forecast additional costs. Business interruption sums insured should then be adjusted to take into account the indemnity period (eg. e.g. doubled for 2 years indemnity period) Average In the event of under-insurance, Insurers may reduce the amount of any claim settlement in the same proportion as the sum insured bears to the total value of the insured items.)

Loss of Profits Insurance. Several types of cover exist; Gross Profit basis (usual for manufacturers, retailers etc); Gross Revenue basis (normally for consultants, professions); and Increased cost of working basis, for businesses that believe there would be no loss of profit or revenue in the event of a claim, but would need to cover increased trading costs until the claim is settled. ‘Accounting Gross Profit’ and ‘Insurance Gross Profit’ are not the same thing. Where your Your policy includes this cover, the Sum Insured for ‘Gross Profit’ should normally be calculated using the following method: Annual turnover plus year-end stock and work in progress; less opening stock (and work in progress) and purchases, bad debts and uninsured variable expenses (such as the purchase of raw materials or shipping costs) Gross Revenue insures the total turnover without deductions and Increased Cost of Working is based on projected additional costs of temporary relocation and other forecast additional costs. Business interruption sums insured should then be adjusted to take into account the indemnity period (eg. e.g. doubled for 2 years indemnity period) Average In the event of under-insurance, Insurers may reduce the amount of any claim settlement in the same proportion as the sum insured bears to the total value of the insured items.)

Loss of Profits Insurance. Several types of cover exist; Gross Profit basis (usual for manufacturers, retailers etc); Gross Revenue basis (normally for consultants, professions); and Increased cost of working basis, for businesses that believe there would be no loss of profit or revenue in the event of a claim, but would need to cover increased trading costs until the claim is settled. ‘Accounting Gross Profit’ and ‘Insurance Gross Profit’ are not the same thing. Where your Your policy includes this cover, the Sum Insured for ‘Gross Profit’ should normally be calculated using the following method: Annual turnover plus year-end stock and work in progress; less opening stock (and work in progress) and purchases, bad debts and uninsured variable expenses (such as the purchase of raw materials or shipping costs) Gross Revenue insures the total turnover without deductions and Increased Cost of Working is based on projected additional costs of temporary relocation and other forecast additional costs. Business interruption sums insured should then be adjusted to take into account the indemnity period (eg. doubled for 2 years indemnity period) Average In the event of under-insurance, Insurers may reduce the amount of any claim settlement in the same proportion as the sum insured bears to the total value of the insured items.