Also known as consequential loss insurance, Fire Business Interruption Insurance provides indemnity to the insured in respect of loss of profit. Any loss under the material damage policy will affect the business interruption insurance as this will lead to interruption in the business in terms of loss of production, sales and consequently earnings. The insurance can only be taken together with fire insurance (please refer to Fire Insurance under Personal Lines section).
The policy compensates any loss resulting from fire including damage by any additional perils specified in the material damage policy in respect of:-
- Loss of gross profit following reduction in turnover
- Increase in cost of working
Depending on the insured’s needs and subject to the insurer’s agreement and the payment of additional premiums, the basic policy can be extended to cover the following special perils:-
- Specified/Unspecified supplier’s premises.
- Prevention of access extension.
- Public utilities extension (water, electricity and gas).
- Specified customer’s premises.
- Infectious or contagious diseases, murder, suicide, pest, food or drink poisoning or defective sanitary arrangements
Since the business interruption policy comes together with the material damage insurance, the exclusions will be similar to material damage policy.