As business entities suffer damages after fire incident (Fire & allied Perils) and the Business entity still obliged to pay salaries, rent and other expenses.

Based on above, The Insured (Participant) could cover above expenses for (6) months or (12) months, which is loss of profit or Business Interruption Insurance.But the client must obtain property insurance in order to get loss of Profit Insurance.

The followings are definitions of terms mentioned in L.O.P Insurance.

Gross Profit: Net profit plus general expenses such as salaries, rent and etc but in case no profit for the business entity then to do loss of profit insurance on general expenses only.

Net Profit: Net income after payment of all expenses including depreciation and before deduction of income Tax.

Operating Expenses: Rent, Finance & Bank fees, Insurance Premium, Advertising, Printing & Stationery, Electricity bill, Water, Travel Expenses, Maintenance expenses of engines and equipments, building depreciation and equipment depreciation

Gross Income: Total Sales generated from goods and services

Indemnity Period: (6) months or (12) months, which depends on estimation of recovery period required to resume their business. The amount of compensation depends on
1. Reduction in Sales
2. Increase in Operating Costs, insurance premium depends on nature of place insured, amount and other factors.


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