Fire InsuranceFire Loss Of Profit

Loss Of Profit

Company Name *
Full Name *
Phone *


Fire Loss of Profit (FLOP)

Fire and Special Perils Policy compensates only for Material Damage to the insured property. It specifically excludes any consequential loss. In case of a significant loss caused by fire, there could be an interruption in business operation, leading to a reduction in turnover finally resulting in possible loss of profits. However, standing or fixed charges continue to accrue regardless of whether there is any production or not. Such loss cannot be covered under a Fire policy. This policy can be taken only in conjunction with a Standard Fire Insurance Policy.
Consequential Loss Policy compensates for the profit, plus insured's in other words, revenue loss minus variable expenses suffered by the enterprise. Hence, for complete protection to the business enterprise and its profitability, Consequential Loss Policy is essential in addition to Standard Fire and Special Perils Policy.
This policy is also known as Business Interruption Policy or FLOP (Fire Loss of Profit Policy).

Key Benefits

  • Fire insurance is designed to protect in respect of loss to buildings, machinery, fixtures, goods etc. by fire and or other insured perils. In other words, fire insurance affords cover for 'material damage'.
    However, an indemnity for the material damage does not provide complete protection to the insured who will also suffer trading losses due to total or partial stoppage of his business. The object of loss of profit insurance (also known as Consequential Loss or Business Interruption insurance) is to make good for loss of gross profit.
  • The Fire insurance policy is issued for a maximum of one year term and expires thereafter. Still, the loss of profit policy indemnity period may go beyond even after the expiry of Fire policy, as the same is calculated from the date of actual accident/loss.


  • Loss of net trading profit
  • Standing charges (continuing fixed expenses)
  • Loss in respect of wages other than those covered by the standing charges
  • Increased cost of working
  • Auditor's fees

Add on covers

For a more comprehensive cover, you have the option to select the following add-ons at an additional premium.

  • Accidental failure of public electricity/gas/water supply
  • Damage to customer's premises due to perils covered under Fire Insurance Policy
  • Damage to supplier's premises due to perils covered under Fire Insurance Policy
  • Spoilage Risk extension
  • Wages-dual basis or pro-rata basis
  • Lay-off and retrenchment compensation
  • Notice Wages Liability
  • Insured's property stored in other situations
  • Molten material damage
  • Terrorism


  • Cost of preparation of fire and consequential loss claims
  • Litigation costs connected with fire or consequential loss claims generally
  • Third-party claims
  • Failure to recover book debts owing to the destruction of records
  • Loss of goodwill
  • Loss of market
  • Fines and penalties payable due to delayed fulfilment or cancellation of sale/service contract
  • War, invasion, the act of a foreign enemy, hostilities or warlike operations (whether war be declared or not), civil war
  • Mutiny, civil commotion assuming the proportion of or amounting to a popular rising, military rising, insurrection, rebellion, revolution, and military usurped power
  • Nuclear power reactions and radiations
  • The difference between the value of the stock at the time of the fire and at the time of subsequent replacement
  • Depreciation of undamaged stock after a fire
  • Loss that is not admissible under a Fire (Material Damage) Policy

Claim Process

In the event of loss, the following are immediate actions to be taken
Intimate to the insurer the occurrence of loss, submit a full statement in writing of the claim, provide the nature and extent of loss and also the estimate of loss. Any delay in intimation might jeopardize the claim as the insurer may express an inability in accepting liability of the loss/damage.

  • To take all steps to reduce and minimize the extent of loss/damage and liability.
  • Proximate cause of the loss and assess the type/extent and whether it is within the scope of the policy
  • To extend full co-operation to the insurer and the surveyor appointed for completion of the survey work and for proper assessment of the loss.
  • Produce all such records and proof as may be required by the surveyor or the insurer for arriving at the extent of loss and the liability under the policy.
  • Provide documents such as claim form, Claim bill, copy of policy etc.
  • Keep the damaged property under the safe custody until advised by the surveyor/insurer regarding its disposal.
  • Identification of the subject-matter insured.

Why Choose PrishaPolicy

5 Reasons why you should choose us to be your policy issuing partner of choice. Allow us to tell you why we are one of the fastest growing insurance brokers.

Customer-Centric Culture

For us, you always come first. Our products and services are designed to find the best coverage for all.

A Decade of Market Leadership

Our teams expertise and experience makes them the perfect guides in choosing a policy that fits your needs.

Reliable and Consistent

Rest assured that everything will be taken care of without a glitch. From shortlisting to claims processing & delivering promises without a hitch.

Guided Policy Assistance

Our experts are forever ready to assist you through each policy detail with a fine-tooth comb.

Claims Assistance

Our DNA prompts - Sales is incomplete without timely support. From start to end, we facilitate smooth processing from lodging to settlement.

Still Thinking About It?

Get on a call with us. We take pride in being associated with you for competitively managing your risks with the best insurance covers and delivering a stress-free experience.

Full Name *
Email *
Phone *

Questions You Might Have

Why do I need to insure my building?

Your building may get damaged due to fire or other perils and the losses will not be covered by a general insurance policy. For that, you'll need a fire insurance that will cover the damages sustained by the building. Similarly, natural calamities also may wreak devastating losses, which can burn a hole in your pocket. Hence, to safeguard your property, you need fire insurance.

Can I cancel my policy in the middle of the policy tenure? Will the amount be refunded?

Yes, the insurance company will give you a pro-rated refund of premium. If there is any retention of premium or balance for a short period, it will be refunded.

Does fire insurance also offer coverage for jewellery, ornaments and artworks?

Usually, general fire insurance doesn't cover these items, unless discussed with the insurer while buying the policy. However, on special request and subject to valuation, these items can be covered under a policy.

What property insurance should I purchase if I own an SME?

There are various insurance plans offering coverage against risks such as fire, earthquakes, floods that cause damage to the building, unexpected breakdown of any machinery, damage to electronic equipment, workmen compensation, fidelity guarantee, cargo risks cover etc. You can select the Sum Insured for every category based on the insurance needs of the enterprise.

Does burglary insurance cover my household goods when I am away?

A burglary insurance policy covers you against the risk of theft. However, the policy will cease if the house remains unoccupied beyond a defined period unless the insurance company has been informed beforehand. In such cases, you will be covered only if the insurer agrees to extend the cover even if the house is empty. This is why it is important to clear everything at the time of buying the plan.

Am I eligible to claim a higher amount if opt for a higher value?

No. The correct claim amount is decided based on the current market value of your property and the basic Sum Insured. The compensation that is to be offered, in case of a loss, will be decided on whether the property is sufficiently insured or not. If you choose an excessive amount, it will mean excessive premium, while in case the amount is adequate, you'll get an amount is equal to the market value of the property. In both the cases, the offered claim amount will be the same.

How to handle a loss in case of a fire?

Despite all the precautions, you can't predict a calamity. Hence, you need to be calm in case any such situation arises. In case of a fire, inform the local fire brigade who will help you to put out the fire. If there is any loss of another person's property due to the fire or in an effort to douse it, the insurer shall compensate for the same.
Inform the insurer, cooperate with the supervisor at the time of loss assessment. You can also take photos of the loss if the surveyor takes a lot of time to arrive and shift all the unaffected assets to a safe place. Fill the claim form and submit it along with the documents supporting your claim. After the repair or replacement of damages, submit all the bills to the insurer.