Insurance for the Businessman -Loss of profits

From its name you might think that a 'loss of profits' policy should compensate you if your business goes badly with a corresponding fall in profits. This is not the case. A `loss of profits' policy covers only lost profits resulting from forced interruptions to your business activities. For example, if your factory, warehouse or office were to burn down, you would still have to pay rent and rates and salaries to employees even though your own income was reduced. You might also incur extra costs for temporary premises or overtime work needed to complete outstanding contracts. The basic standard fire policy with extensions would cover the cost of replacing or repairing loss or damage caused by fire, and the loss of profits' (or consequential loss, or business interruption policy, as it is sometimes known) is designed to cover the extra expenses outlined above. It would not cover loss of profits resulting from an industrial strike by employees.

Insure for the full sum which a shutdown for about a year would cost you. To do this you will have to estimate the following year's results, which can sometimes be a difficult exercise. Since it is better to over-insure/than to under-insure, estimate on the safe side and arrange with your insurer to provide for the return of up to 9o % of your premium if your gross profits eventually fall considerably short of your estimated sum insured. Calculate your sum insured, bearing in mind

i. Extra expenses incurred to restore normal trading conditions.

2. Rent, rates, interest on overdrafts, advertising and other fixed outgoings which have to be paid even if you are temporarily forced to work elsewhere.

3. Loss of profits.

4. Employees' salaries, including National Insurance contributions, etc., liability for pensions and other benefits for which you are liable under the Contracts of Employment and Redundancy Payment Acts.

If you are dependent on a particular supplier or customer, extend your own `loss of profits' policy to cover losses arising from a fire or flood on the other's premises.


Loss of profits

Payroll Giving
It’s all very easy to organise.
Just ask the Personnel or the Payroll Department at your company and, if they already have a scheme, they will give you the relevant forms.  HM Revenue & Customs’ website has a list of Payroll Giving agencies and explains payroll giving in more detail.

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Cheaper Insurance for Salons, Freelance Hair and Beauty, and Mobile Businesses - click here

read on: Insurance for the Businessman -Mishaps to employees

From its name you might think that a 'loss of profits' policy should compensate you if your business goes badly with a corresponding fall in profits. This is not the case. A `loss of profits' policy covers only lost profits resulting from forced interruptions to your business activities. For example, if your factory, warehouse or office were to burn down, you would still have to pay rent and rates and salaries to employees even though your own income was reduced. You might also incur extra costs for temporary premises or overtime work needed to complete outstanding contracts. The basic standard fire... see: Insurance for the Businessman -Mishaps to employees