Business Interruption Insurance

Fire Loss of Profit (FLOP) Insurance, also known as Business Interruption Insurance, covers the financial losses a business experiences when normal operations are halted due to a fire or other covered perils. While a standard fire policy only pays to repair physical damage, FLOP ensures your revenue, fixed expenses, and profits stay intact during the recovery period.

Business interruption insurance is designed to protect your company's profits and ensure operational continuity following a covered event, such as a fire, natural disaster, or equipment damage.

If your insured property is lost or damaged, this coverage compensates for lost revenue and covers ongoing operating expenses. Business Interruption Insurance protects profit margins until the business is back on its feet and back at its profit level before the interruption.

• Sum Insured
  • Gross Profit (i.e., Net Profit + Standing Charges)
  • Indemnity Period
• Coverage

  When operations are interrupted, LOP compensates for the following financial impacts:

  • Loss of Net Profit: Reimburses the profits your business would have earned during the downtime, calculated using past financial records.
  • Standing Charges: Ongoing fixed expenses that continue regardless of production halts, such as rent, loan interest, taxes, and employee salaries.
  • Increased Cost of Working: Covers additional, reasonable, and necessary costs required to keep the business running from a temporary location (e.g., temporary office setup, moving expenses).

Trigger: It typically activates only if the interruption results from direct physical loss or damage to your property caused by a covered peril (e.g., a fire or natural disaster under a Fire Insurance Policy).

Period of Restoration: Coverage generally pays out from the date of the disaster until your property is rebuilt and operations resume.