Page 294 - Fire Insurance Ebook IC 57

Fire and Consequential Loss Insurance

the basis (to be adjusted as necessary) for calculation for average
purposes of the insurable amount on gross profit.

Standard turnover

This means that if a fire occurs on the 1st January, and the business is
affected during the following three months, January to March, then in
ascertaining the shortage in turnover because of the fire, the figures
for those months are compared with January to March in the preceding
year. It is considered that this gives a fair basis of comparison.

Adjustment clause :

By means of this clause any adjustment may be made to the pre-fire
figures used to calculate the loss, if by means of those adjustments, it
is evident that something approaching true indemnity will be attained.

Any figures taken from past experience for calculation of the loss can
be at best a guide only to the figures which would have been produced,
had a fire not occured.

The wording of the clause is examined below.

"As may be necessary"
The business may be on an even course, with little of the unexpected.
It may, therefore, be unnecessary to make any adjustment and both
parties to the contract are satisfied.

"The trend of the business"
The majority of healthy businesses will show an upward trend in
turnover, hi normal times.

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