Claims falling under this category arise as a direct result of destruction or damage to property and these are entertained only after the liability under the material damage policy has been admitted or claims settlement made.

The financial magnitude and the length of the interruption period of the loss may be determined by what action is taken immediately after the material loss. It is therefore of practical concern when a loss occurs that quick action is taken to mitigate the financial loss to the business, and the following guidelines are intended to assist you in expediting the loss settlement.

• Identify the areas of financial loss occurring as a result of material damage to the insured property.
• Implement contingency business plans and advise the adjuster how you intend to proceed.
• You may wish to discuss with the adjuster;
  • Salvage sale.
  • Use of alternative premises.
  • Alternative sources of supply
  • Additional expenses, which you feel, would minimize loss of Gross Profit to the business.
  • Retrenchment of workers.
• Establish separate books of account for documenting extra expenses incurred to minimize losses resulting from the interruption of the business.
• Record all trends or circumstances affecting the business during the interruption period.
• In attempting to continue business, do not incur expenses over and above what the business would possibly have lost in Gross Profit.

In establishing your profits claim it would be necessary to provide the following information:-

• The turnover achieved in the interruption period.
• The turnover achieved in the similar period in the previous year.
• The turnover for the 12 months immediately preceding the date of the damage.
• Gross Profit as per policy definition taken from the last completed financial year.
• Turnover from the last financial year and the previous year.
• Any increased costs relevant to the loss with full descriptions and rationales for the expenditure.
• Savings in standing charges.
• Adjustments for trends and special circumstances affecting the business.
• Turnover achieved elsewhere other than at the insured premises for the benefit of the business.