Page 338 - Fire Insurance Ebook IC 57

Fire and Consequential Loss Insurance

(ii) The indemnity period under the main policy and
the extension should be identical.

Q4. Discuss insurance of wages in respect of
following:

Ans. (A) Concept -
The basic policy deals with the Net Profit plus the
Insured Standing charges. The policy may, however,
cover additional wages, lay-off/retrenchment
compensation and auditors fees.

Salaries are usually insured as standing charge for the
full indemnity period selected for one gross profit item.
For wages, however, different conditions apply depending
on the circumstances of the particular business.

In the recent years , the importance if wages have grown
considerably, partly due to the large proportion of total
costs now frequently appropriated by wages, and partly
due to the increased power of organized labour. The
inclusion of all wages is the simplest one, specially when
the relative cost is not heavy, as in a highly mechanized
factory.

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