Property Insurance In Form Of Missed Profit

What is profit of enterprise or company? Of course, it is the result of production process, or accumulating of material or technical values. The easiest way of calculation is to increase output by standard coefficient for products unit.

Manufacturing goods the entrepreneur surely deals with a certain planning of the amounts which he can expect from the received profit. Based on these indicators in addition to possibility of funds accumulation it is possible to expect possibility to return taken under it credits or loan, possibility of payments for leasing of production equipment, etc. Therefore, in the absence of profit the opportunity to pay bills in time, and also charges of the additional commissions, penalties, etc. is lost. Threat of inventory loss of the company is created.

Therefore, such type of insurance is also present in the market of insurance. However for the purpose of non-admission of intentional stop of production, in order the entrepreneur would be interested in the fastest renewal of production in case of a loss occurrence, insurance payment amounts only 20%.

Also, the insurance sum won’t be paid if the disruption has resulted from change of originally declared project, because of forced reconstruction of the damaged production, planned repair, shortage of funds (labor, material, financial resources) for prevention or elimination of idle time in production, prohibition of authorities to perform recovery work.

Comments are closed.