Fires can cause huge damage to your property and business, leading to major physical and financial setbacks. One of the primary losses a business experiences after a fire is the loss of profit or income.
While reliable fire insurance covers damage to tangible property and assets, it is crucial to protect your business’s lost profit and opportunity income. In this blog, we explore the loss of profit coverage in TATA AIG’s fire insurance in depth.
Understanding Loss of Profit Due to Fire
TATA AIG offers a wide variety of fire insurance policies, including consequential loss fire insurance, which can also be called business interruption insurance. This policy is designed to cover financial losses a business may incur due to the inability to operate after a fire.
If you opt for the consequential loss fire insurance policy, you get compensated for the profit or income that you would have made had the fire incident not occurred. This fire insurance coverage proves to be a valuable inclusion, resulting in increased financial protection.
The list of incidents that might lead to a loss of profit is given below:
- Paused operations due to fire damage to business premises
- Fire perils rendering property or machinery inoperable
- Additional expenses required to resume operations
- Loss of income due to shutdowns and reduced production
- Delayed repairs leading to business interruption
TATA AIG Fire Insurance: Loss of Profit Coverage
● Standing Charges
A business is charged with multiple fixed expenses, such as rent, loan interest, utilities and more. TATA AIG’s fire insurance consequential loss coverage helps pay off these costs. This coverage fund acts as a support system that offers financial assistance to keep the business upright for a limited period.
● Employee Wages
As an entrepreneur or employer, it is important to compensate your employees during business interruption. When the business operations stop, their income and day-to-day lives are in jeopardy.
TATA AIG fire insurance offers employee wages for your skilled staff and unskilled workers to retain talent. There is also a provision to send severance payments if needed.
● Additional Expenses
You will need to spend additional money to minimise the business interruption loss and resume operations. These expenses usually include rented machinery, temporary relocation, rent, repairs and more.
This requires money, and TATA AIG consequential loss fire insurance offers financial coverage for these additional expenses.
● Loss of Gross Profit
Gross profit refers to the profit earned by your business without factoring in expenses. Due to the fire and business interruption, loss of gross profit can be significant. However, TATA AIG’s fire insurance coverage offers financial cover for the gross profit the business would have earned during the interruption period.
● Auditor’s Charges
An auditor is a professional inspection officer who calculates the exact loss of profit after the fire incident. Before you raise a claim under your fire insurance policy against fire damages, you need to quote a near-accurate amount as compensation, and for that, you need an auditor.
As an add-on coverage, TATA AIG fire insurance covers the cost associated with hiring auditors to assess the financial loss, ensuring accurate and rightful compensation.
● Supplier’s Extension
Supplier’s extension is another add-on coverage offered by TATA AIG fire insurance consequential loss policy. If a fire at your supplier’s premises halts the supply chain, causing a loss of profit in your business, you can file for a compensatory claim under your fire insurance.
● Customer’s Extension
The customer’s extension is also an add-on offered by TATA AIG fire insurance. This add-on states that a fire at a customer’s or client’s premise, disturbing the supply chain, can cause a loss of profit for your business. As a result, you can raise a fire insurance claim to compensate for your loss.
TATA AIG Fire Insurance: Benefits of Loss of Profit Coverage
- The consequential loss fire insurance by TATA AIG offers financial stability, resulting in a balanced annual turnover.
- Employee wages coverage in the policy helps you retain most of your employees. This increases employee retention and saves money on new hires and training.
- With the valuable add-ons, you can compensate yourself for various additional expenses and loss of income.
- The comprehensive coverage aids rapid recovery of your business and operations.
Conclusion
TATA AIG’s consequential loss fire insurance is an essential layer of safety you need for your business. Fire can cripple the finances and operations of your business, leading to losses and severe damage in all aspects of your business.
With the help of fire insurance coverage for loss of profit, you can secure your business against significant losses primarily because it allows loss mitigation and straightforward recovery.
