GENERAL KNOWLEDGE

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GK

INSURANCE AWARENESS

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Losses other than property damage that occur as a result of physical loss to a business for example, the cost of maintaining key employees to help reorganize after a fire is called ____
A
Consequential loss
B
Conditional Receipt
C
Conditional Contract
D
Conditional Renewable
Explanation: 

Detailed explanation-1: -Issue: Business interruption (BI) insurance, also called business income insurance, helps small businesses protect against monetary losses due to periods of suspended operations when a covered event, such as a fire, occurs and causes physical property damage.

Detailed explanation-2: -Understanding Consequential Loss with Examples A factory is involved in a fire. As a result, much of the plant machinery has become permanently unusable. The insurance policy covers the direct loss of the machinery to the owner’s relief. However, the factory could not produce goods as the fire destroyed most machines.

Detailed explanation-3: -Any interruption in business operations caused by fire or other special perils, resulting in a financial loss of various kinds is called consequential loss. A consequential loss insurance policy for fire or other special perils financially compensates the owner for the lost business income due to fire.

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