How is loss of profits insurance defined and how is it compensated

Product Introduction. Loss of profit insurance first appeared in France in 1860, and the People's Bank of China unified clause was officially introduced on January 1, 1995, and the product is applicable to all types of enterprises operating in China.

Subject matter of insurance. Loss of profit insurance is mainly for the normal operation of the enterprise to protect all loss of profits.

Features: This insurance is an additional and supplementary property insurance, which cannot be independently underwritten, and only if the property insurance is insured, the insurance company is responsible for compensation for the loss of profits caused by the occurrence of a disaster accident within the scope of property insurance liability.

Key Risks Covered.

The business carried on at the premises designated by the insured is due to the occurrence of:

1) Fire, lightning, **;

2) Storms, storms, typhoons, floods;

iii) the crash of an aircraft and the fall of its parts;

Gross profit loss due to a decrease in turnover and an increase in operating expenses.

Exclusions. 1) Intentional act or actual negligence of the insured or its representative.

b) War, war-like operations, hostilities, armed conflict, confiscation or requisition.

(iii) nuclear reactions, nuclear radiation or nuclear contamination.

4) Any other cause or risk that is not covered by the property insurance policy issued by the insurer.

Amount of insurance and premium.

If the compensation period does not exceed 12 months, the insurance amount shall be the estimated gross profit amount of the current year, and the compensation period can generally be selected as 6 months, 12 months, 18 months, 24 months .........For detailed insurance liability and exclusion clauses, you can ask the property insurance company for a clause to see, which generally does not cover small and medium-sized enterprises, and is usually underwritten by large units as an additional insurance for property all risks.

Loss of profit insurance, also known as "business interruption insurance", is an expanded type of insurance that is attached to property insurance. General property insurance is only responsible for the direct loss of various types of property, and is not responsible for the loss of profits caused by damage to property. Profit loss insurance is a special insurance for industrial and commercial enterprises.

It covers the foreseeable loss of profits, or the expenses that remain to be incurred by the insured during a period of time when the insured is out of business or work after a disaster.

Insurance experts remind you that profit loss and loss insurance cannot be insured separately, it is based on property insurance and property all risks, and whether the insured holds a fully effective property insurance policy is an indispensable insurance condition for profit loss insurance. All enterprises and institutions, social organizations, individual industrial and commercial households and other economic organizations established in accordance with the law can be insured.

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Loss of profit insurance is known as post-catastrophe loss insurance in the UK insurance market and business interruption insurance in the US insurance market. Loss of profit insurance provides loss compensation for losses of indirect consequences that are not covered in traditional property insurance. It covers indirect economic losses caused by the insured's suspension of production, suspension of business or impact on business for a certain period of time due to natural disasters or accidents such as fires, including losses such as loss of profits and necessary expenses that are still incurred during the business interruption period after the disaster.

Loss of profit insurance is an additional insurance that is attached to the basic policy of fire or property insurance and is an insurance that expands the liability. Since the risks covered by the loss of profits insurance are the same as those covered by fire or property insurance, the insurer is only liable to compensate for the loss of profits caused by the accident if the property has suffered material damage from the accident before the insurance call and such material loss has been or can be covered by insurance.

Answer]: Cover wheel a, b, c

Loss of Profit Insurance not only compensates for the loss of gross profits, but also covers the necessary expenses paid during the period of business and the dishonesty. Specifically, it includes the loss of gross profit due to the decrease in turnover, the loss of high gross profit due to the increase in operating expenses, and the loss of commissions.

1) The principle of insurance interests.

Insurance interest refers to the legal interest of the policyholder in the insurance mark.

The Insurance Law stipulates that when life insurance is signed, it must play an insurance role for the insured. For other insurances, the subject matter of property insurance is property and other interests, while the subject matter of life insurance is the life and personal safety of the insured.

2) The principle of maximum good faith.

Integrity is the most basic virtue of life, and in the insurance contract relationship, integrity is very important. The principle of maximum good faith means that when the parties request compensation from the insurance company, they must honestly and fully disclose important facts to the other party, and no false or deceptive behavior is allowed. In addition, when signing the insurance contract, honesty is also necessary, and it is necessary to honestly report the information required to sign the contract, so as to avoid the failure to make claims after the insurance due to false information.

3) The principle of proximate cause.

The principle of proximate cause refers to the fact that the insured accident is the cause of the claim, and the most direct and effective reason is selected. In the insured event, the proximate cause belongs to the insurance liability, the insurance company is liable for compensation, and the insurance company cannot pay for all reasons, otherwise the economic loss of the insurance company will be very large, so when paying compensation, only the most direct cause can be selected for compensation.

4) The principle of compensation for losses.

The principle of loss compensation is divided into two types, one is that after the accident agreed in the insurance contract, the insured suffers an economic loss, and the insurance company will compensate for it, but if the insured has no loss, then it will not be compensated. The second is the amount of compensation that the insured can provide, which is to restore the subject matter of the insurance to its original appearance financially, and the insured cannot get additional benefits through compensation.

1. What are the insurance benefits of property insurance?

1) Existing interests. An existing interest is an interest that the policyholder or insured has and continues to have in respect of the property. If the policyholder has legal ownership, mortgage, pledge, lien, pawn and other relationships with the property and continues to exist, it has an insurance interest.

Existing interests arise with the existence of property rights.

2) Expected benefits. An expected interest is an interest that arises by law or contract for a certain period of time in the future as a result of the existing interest in the property. It includes profit benefits, rental income benefits, freight income benefits, etc.

3) Liability interests. Liability interest is the liability of the insured for its civil damage to a third party in accordance with the law, and it is an insurance interest based on the civil liability in law, such as professional liability, product liability, public liability, employer liability, etc. According to the classification of liability insurance, the following persons have liability insurance interests:

owners, operators or managers of various fixed premises; manufacturers, sellers, repairers; Employer; all kinds of professionals, etc. For example, if a car is injured by the driver's fault while driving, the perpetrator shall be liable for compensation to the victim in accordance with the law; The liability of a doctor for compensation to a patient due to his negligence in practicing medicine, etc.

4) Contractual Benefits. A contractual interest is an insurance benefit that arises on the basis of a valid contract.

Answer]: B Profit loss insurance, also known as business interruption insurance, compensates for the loss of profits caused by disasters and accidents caused by normal production or business interruption, and is a kind of insurance that is attached to the property insurance of the enterprise. a, loss of profit insurance can only be underwritten as an add-on or add-on for a property insurance business; In item C, the insured amount is generally determined according to the expected gross profit of the current year, that is, according to the sales or turnover in the accounts of the previous year; d, loss of profit insurance generally stipulates a deductible, and the insured bears a part of the loss.

Dear, hello, I'm glad to answer for you, I have the following questions about this: profit loss is also divided into gross profit loss and net profit loss, but first of all, we must calculate the expected or due turnover in the unit period, and then deduct the expected or due cost (including production costs or sales costs, etc., net profit should also deduct expenses, labor, operating costs, etc.), and finally get the due profit, or if you have profit expectations, the wheelsman or better. Then calculate your actual turnover and costs due to some reasons, calculate the actual profit, and then subtract the rough one.

If the performance of the contractual obligations of the parties is not in accordance with the agreement and causes losses to the other party, the amount of compensation for the losses shall be equivalent to the losses caused by the breach of contract, including the benefits that can be obtained after the performance of the contract. According to the nature of the transaction, the purpose of the contract and other factors, the loss of available profits is mainly divided into production profit loss, operating profit loss and resale profit loss. In the case of a breach of a sales contract for production equipment and raw materials, the loss of profits available to the buyer caused by the seller's breach of contract is usually a loss of production profits.

Legal basis: Civil Code of the People's Republic of China

Article 577:Where one of the parties fails to perform its contractual obligations or the performance of its contractual obligations does not conform to the agreement, it shall bear the liability for breach of contract such as continuing to perform, taking remedial measures, or compensating for losses.

Article 578:Where one of the parties expressly states or shows by its own conduct that it does not perform its obligations under a friendly contract, the other party may request that it bear liability for breach of contract before the expiration of the performance period.

Article 579:Where one of the parties fails to pay the price, remuneration, rent, or interest, or fails to perform other monetary debts, the other party may request payment.