All insurance companies there is a very important factor, if not crucial, to consider before signing a policy with a particular insurer. We talk about coverage for loss of profits , also called lost profits or stoppage of activity.
It supposed to hire anticipate the possibility of unforeseen contingencies in many areas, covering economic performance loss due to a total or partial, temporary interruption of our business activity carried out for the sake of an accident.
The causes of this bad news for our company can be very diverse. Broadly speaking, it is usual that such insurance cover circumstances caused either by accident natural (floods, storms) or by mechanical reasons (explosions) or by human actions (vandalism, strikes).
Such risks are generally optional to basic insurance, and account pay an additional premium for the product that we hire, we will also have at our disposal many other coverages more that can be incorporated in policy: loss of profits due to the impossibility of access to facilities ; by power failure; lack of suppliers, customers or both; valve malfunction machinery; by electrical damage ...
direct and indirect damages
In this sense we must take into account not only direct, but also indirect losses that arise from a decrease in the activity of each company and therefore assume that obtain numbers worse than expected earnings. This coverage, therefore, tries to help minimize or, at best, completely overcome losses from these multiple events that may occur.
Also it is common for insurance of this type include in its compensation all those disbursements - purchase of raw materials, goods, machinery ... - made by a particular signature in order to avoid or lessen the decrease in turnover, and even costs of repairs made to try to reduce the damage of the accident. As always, we must have all the information about the coverage we have access before signing the agreement with the insurer , with our insurance agent to know in depth the extent of coverage that suits our needs.
When hiring our policy - and later, when receiving the insurance compensation if any - also we distinguish very clearly what our costs are fixed and which variables. The first they are those who do not depend directly on the turnover of our company, so it can be kept in any situation (in the case of payments to staff, rent, taxes, costs minimal by water services, electricity or heating, advertising ...); the latter are directly dependent on the activity of the company: raw materials, employee incentives, work done by other companies ... and therefore are variable.
As for how to subscribe, you can be performed in two ways: either by a specific policy or through other insurance as an additional guarantee, as in the case of multi - risk trade, SMEs , etc ..
Three concepts for compensation
In general, thanks to a sure loss of profit the customer can be compensated by three different concepts: the loss of benefits that cause particular incident - during the period has been provided in the policy previously signed - the expenses have occurred as a direct result of the incident and overhead costs continue being generated and those who must face the insured after the accident occurred.
It should also be noted that the amounts to be received in case of accident will respond to the conditions laid down in the policy, so they should be clearly specified criteria by which compensation be quantified if applicable. And there is always the customer will be paid after the situation lost profits, as well as have occurred, has been tested. Naturally, insurers must provide control measures to avoid the possibility of fraud.
Finally, we note that there are three modes of payment of compensation insurance these characteristics: the payment of a daily allowance as compensation, compensation based on the permanent expenses or include them and the loss of benefits of a certain company.
It supposed to hire anticipate the possibility of unforeseen contingencies in many areas, covering economic performance loss due to a total or partial, temporary interruption of our business activity carried out for the sake of an accident.
The causes of this bad news for our company can be very diverse. Broadly speaking, it is usual that such insurance cover circumstances caused either by accident natural (floods, storms) or by mechanical reasons (explosions) or by human actions (vandalism, strikes).
Such risks are generally optional to basic insurance, and account pay an additional premium for the product that we hire, we will also have at our disposal many other coverages more that can be incorporated in policy: loss of profits due to the impossibility of access to facilities ; by power failure; lack of suppliers, customers or both; valve malfunction machinery; by electrical damage ...
direct and indirect damages
In this sense we must take into account not only direct, but also indirect losses that arise from a decrease in the activity of each company and therefore assume that obtain numbers worse than expected earnings. This coverage, therefore, tries to help minimize or, at best, completely overcome losses from these multiple events that may occur.
Also it is common for insurance of this type include in its compensation all those disbursements - purchase of raw materials, goods, machinery ... - made by a particular signature in order to avoid or lessen the decrease in turnover, and even costs of repairs made to try to reduce the damage of the accident. As always, we must have all the information about the coverage we have access before signing the agreement with the insurer , with our insurance agent to know in depth the extent of coverage that suits our needs.
When hiring our policy - and later, when receiving the insurance compensation if any - also we distinguish very clearly what our costs are fixed and which variables. The first they are those who do not depend directly on the turnover of our company, so it can be kept in any situation (in the case of payments to staff, rent, taxes, costs minimal by water services, electricity or heating, advertising ...); the latter are directly dependent on the activity of the company: raw materials, employee incentives, work done by other companies ... and therefore are variable.
As for how to subscribe, you can be performed in two ways: either by a specific policy or through other insurance as an additional guarantee, as in the case of multi - risk trade, SMEs , etc ..
Three concepts for compensation
In general, thanks to a sure loss of profit the customer can be compensated by three different concepts: the loss of benefits that cause particular incident - during the period has been provided in the policy previously signed - the expenses have occurred as a direct result of the incident and overhead costs continue being generated and those who must face the insured after the accident occurred.
It should also be noted that the amounts to be received in case of accident will respond to the conditions laid down in the policy, so they should be clearly specified criteria by which compensation be quantified if applicable. And there is always the customer will be paid after the situation lost profits, as well as have occurred, has been tested. Naturally, insurers must provide control measures to avoid the possibility of fraud.
Finally, we note that there are three modes of payment of compensation insurance these characteristics: the payment of a daily allowance as compensation, compensation based on the permanent expenses or include them and the loss of benefits of a certain company.