The Fire insurance Policy only covers damage to Insured’s property (the items mentioned in the Schedule). It will not cover losses due to the interruption of business (consequential losses) arising from the fire such as loss of profit and increased cost of working. It is possible that loss of profit or increased cost of working can cause more damage to your business than damage to the property. This policy also could cover standing charges (salaries of employees, loan installments etc.). This policy compensates for speculative losses due to a fire, thus its name, Business Interruption.

Business Interruption is issued where a Fire policy is first obtained by the insured, and usually covers losses resulting from all perils covered therein. It may not be inaccurate to call the Business Interruption an ‘extension’ policy to the Fire policy.

Standard Exclusions

- Under-insurance against material damage under the Fire Policy or any other Policy.

-The difference between value of stock or plant at the time of the fire and the value at the time of   subsequent replacement.

- As the Business Interruption Policy follows the Fire Insurance Policy, all the Exclusions and Excluded   Property described under that Policy are also applicable to this class of insurance.

- Deterioration or spoilage of undamaged stock after damage to the premises by fire or other insured peril,   unless special provision is made for this.

- The cost of preparing claims (accountants’ and auditors’ charges to verify the amount of the claim can be    covered).

- Litigation costs connected with insurance claims and third party claims.