MANAGEMENT

Detailed explanation-1: -The actual amount of the claim is determined by the below formula: Claim Payable = (Loss Suffered x Insured Value) / Total Value.

Detailed explanation-2: -It offers compensation for the costs incurred in the replacement, repair or reconstruction of a property that was damaged due to fire. Since the estimation of loss from fire is unpredictable, this policy is issued with fixed value compensation as an upper limit set by the property insurance policy.

Detailed explanation-3: -A normal fire policy only indemnifies loss of stock or assets, and fails to insure any loss of profit suffered by the concerned business. Therefore, a consequential loss policy should be taken to cover the Loss of profit, Loss of Fixed expenditure, etc. Following are the important terms used in loss of profit policy −

Detailed explanation-4: -The actual amount of claim is determined by the formula: Claim = Loss Suffered x Insured Value/Total Cost. The object of such an Average Clause is to limit the liability of the Insurance Company. Both the insurer and the insured then bear the loss in proportion to the covered and uncovered sum.