Home Products Consequential Loss
Business Interruption — Industrial Cover

When Fire Stops
Your Business.
We Don’t.

Consequential Loss Insurance protects your gross profit, wages, and operating costs when property damage forces your business to halt or operate below capacity.

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Business Revenue Impact

Before
Month 1
Month 2
Month 3
Recovery
Normal revenue
Revenue loss period
Recovery with CL cover
CL Cover Protects your
cash flow
3Items Insured
BIBusiness Interruption
CLConsequential Loss
NAICOMLicensed, LIC 040
Policy Overview

What Is Consequential Loss Insurance?

Also known as Business Interruption insurance, a Consequential Loss policy activates when physical damage to your insured premises (covered by a Fire & Special Perils policy) causes an interruption or reduction in your business operations, allowing you to recover the financial losses that follow.

Key Policy Conditions

  • A Fire & Special Perils policy must be in force on the insured property at the time of the damage for a CL claim to be valid.
  • Payment must have been made or liability admitted under the material damage (Fire) policy before a CL claim is processed.
  • Premium rates are the same as Fire & Special Perils with multipliers depending on the indemnity period and wage insurance basis.
  • The perils covered mirror the Fire & Special Perils policy, fire, lightning, explosion, riot, flood, storm, and allied perils.

Important

“No claim under CL without an active Fire policy.”

Consequential Loss cover only activates when your material damage (Fire & Special Perils) policy also covers the same premises and has responded to the same incident.

Insured Items

What Does the Policy Cover?

A Consequential Loss policy covers three principal financial losses that arise during the interruption period following covered property damage.

Loss of Gross Profit

Compensates for the reduction in gross profit due to a decrease in turnover during the period of business interruption following the insured damage.

Wages & Salaries

Covers wage and salary costs of employees retained during the interruption period when the business cannot operate at normal capacity.

Auditors’ Fees

Reimburses professional fees paid to accountants or auditors for certifying and preparing the financial records needed to support and substantiate a claim.

Claims Process

How a CL Claim Works

The process links directly to your Fire & Special Perils claim, both policies must respond to the same incident.

1

Damage Occurs

Property at insured premises suffers a peril covered by the Fire & Special Perils policy, causing business interruption.

2

Material Damage Claim

The Fire & Special Perils policy is triggered first. Payment is made or liability is admitted for the physical damage.

3

CL Claim Submitted

Once the Fire claim is settled, the Consequential Loss claim is lodged with financial records of turnover loss and increased costs.

4

Auditors Certify

Independent auditors certify the financial loss figures. Their fees are reimbursed under the Auditors’ Fees section of the policy.

5

Settlement Paid

Gross profit loss and wages are reimbursed up to the indemnity period, enabling business recovery and continuity.

Don’t Let a Fire Stop Your Business Permanently

Physical damage can be repaired, but lost revenue, unpaid wages, and idle fixed costs can destroy a business before the repairs are complete. Consequential Loss cover keeps you financially whole.

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