As a software consulting firm, clients are paying you for your expertise and your lifetime unique skills. So, if something happens to your business enterprise or machinery, you may have to suspend your normal business activities. Thus, causing a reduction in your turnover or you may incur certain additional expenditures for keeping normal consulting operation activity maintained. Fire Loss of Profit (FLOP) Insurance tends to address the issue and cover your lost income and additional expenses.
Standard Fire Insurance Policy V/S Fire Loss of Profits
The Fire Standard & Special Perils Policy covers only the material damage and financial loss caused to your property that is covered under the Policy by Fire, or by any of the Special Perils like Flood, Storm, Riot, Strike & Malicious Damage. In contrast, fire loss of profits covers any loss of gross profit and/or increase in the cost of working due to a reduction in turnover or output caused by the operation of a peril covered under the Standard Fire & Special Perils Policy. The only prerequisite of this insurance is that there must be a Standard Fire & Special Perils Policy already in place that covers the risk.
Benefits of Fire Loss of Profits to Software Consulting Firm
This insurance plan together with a standard fire insurance policy will cover you against any damages caused by fire, flood, or other perils. Even if the fire damage and the claim are settled, the insured still faces other losses like loss of business or financial loss. These losses can be much larger than the damage caused by the fire. So it’s important to have this insurance in place for your software consulting firm.
Fire Loss of Profit (FLOP) insurance is a type of insurance that provides coverage for businesses in the event of a fire that results in a loss of profits or revenue.
FLOP insurance covers the loss of profits that a business experiences as a result of a fire, such as lost revenue or increased expenses. It typically includes coverage for the costs of relocating the business, renting temporary space, and paying additional expenses to keep the business running.
To make a claim, the business must demonstrate that the loss of profits was directly caused by the fire and that it took reasonable steps to mitigate the damages. The insurance company will typically investigate the claim to ensure that it is valid before providing compensation.
What does it cover?
A Fire Loss of Profit Insurance policy will reimburse you for the gross profit lost as a direct result of business interruption. Plus, any necessary increased costs incurred to avoid said interruption. And minus any savings in standing charges incurred during the indemnity period.
How to Claim this Insurance?
It is essential for assessing any business interruption loss due to fire or other Perils. Furthermore, for any claim to be eligible under Fire Loss of Profit Insurance, it is a prerequisite that the material damage claim for the said loss event is admitted under Standard Fire & Special Perils insurance.
Exclusions under Fire Loss of Profits Coverage
- Loss caused due to the number of restrictions imposed by governmental authorities.
- Loss caused due to war and invasion.
- Any loss caused to the insured property as a result of the insured’s willful misconduct.
Are you Looking for an Expert Insurance Broker For Fire Loss of Profits Insurance?
If you are looking to purchase Fire Loss of Profit Insurance for your Commercial Establishment. Then, the SecureNow team of experts can help you understand the various Clauses. Also, make sure you have adequate Coverage and Limits.
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