MANAGEMENT

Detailed explanation-1: -The insurers or the insurance company will only pay for the rateable proportion of the loss. The average clause applies only when the sum insured is less than the actual value of the goods or the property.

Detailed explanation-2: -So what is an average clause in an insurance policy? It is a clause requiring that you bear a proportion of any loss if your assets were insured for less than their full reinstatement value.

Detailed explanation-3: -: a clause in an insurance policy that restricts the amount payable to a sum not to exceed the value of the property destroyed and that bears the same proportion to the loss as the face of the policy does to the value of the property insured compare coinsurance.

Detailed explanation-4: -Average Clause in Fire Insurance Policy To take care of cases of under-insurance, there will be an average clause in fire policy. This means that in case of loss the insured has to bear a part of the loss. The insurer will only bear rateable proportion of the loss.

Detailed explanation-5: -This policy covers the diminished profits and continuing fixed expenditures if your company stops or slows down its operations due damages caused by fire or additional coverages. Damages that may occur in a workplace due to fire or other risks are covered by the fire policy.