Page 292 - Fire Insurance Ebook IC 57

Fire and Consequential Loss Insurance

Specification :
Specification is an important part of the Policy, and
provides for -

(a) Items insured under the policy and the relative sums insured, e.g.
Gross Profit, Wages, Auditor's Fees.

(b) Definitions, and
(c) A formula for ascertaining the liability for any loss.

Definitions

Net profit
"The net trading profit (exclusive of all capital receipts and accretions
and all outlay properly chargeable to capital) resulting from the
Business of the Insured at the Premises after due provision has been
made for all standing and other charges including depreciation, but
before the deduction of any taxation chargeable on profits".

Insured standing charges
The Standing Charges covered by the insurance are those specified in
the proposal form and named in the policy, and no others.

Gross profit
This is the net profit, as defined, added to the amount of the insured
standing charges.

"If there be no Net Profit the amount of the Insured Standing Charges
less such a proportion of the net trading loss as the amount of the
Insured Standing Charges bears to all the Standing Charges of the
business".

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