This type of policy will provide indemnity to the insured in the event of loss or damage to property covered under it as a direct result of fire out break, lightning or explosion.
Other extraneous perils such as social disturbances like strike and riot, and natural disasters like storm damage, flood and earthquake can also be covered by an extension of the standard scope of the cover.
The items to be insured are usually made up of the following:
- Office furniture, Electrical & Electronic Equipment
- Plant and Machinery
- Stock of Raw Materials and finished goods
- Loss of Annual Rent for alternative accommodation
Consequential loss Policy
This type of policy often referred to as "business interruption insurance" is designed to indemnify the insured against loss of productive capacity or future earning power which may occur as a result of loss or damage to the premises and property insured under the Fire/Extraneous Perils in 1 above.
This policy is normally taken out conjunction with the Fire Policy so that when the latter pays for the material damage to property insured under it, this will pick up the intangible loss that will flow from the primary loss of the Fire Perils.
The items usually covered under this policy are as follows:
- Gross Profit
- Salary and Wages
- Auditor's fees