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. This causes reduced turnover or additional expenses for maintaining normal consulting operations. 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 material damage to your property caused by Fire or Special Perils like Flood, Storm, Riot, Strike & Malicious Damage. It also includes financial losses related to these perils. In contrast, fire loss of profits covers the loss of gross profit and/or increase in the cost of working. This results from a reduction in turnover or output caused by perils 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) 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, any claim under Fire Loss of Profit Insurance requires the material damage claim’s admission. This must be done 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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