Insurance Claims for Loss of Stock and Loss of Profit

What does fire mean for insurance purposes?

• Fire resulting from its own spontaneous fomentation or heating

• Fire resulting from earthquake, subterraneous fire, riot, civil commotion, war, invasion act of foreign enemy, hostilities

• Fire resulting from lightning

• All of the above

What is the amount of claim for total loss of goods fully destroyed?

• Actual loss (provided the goods are fully insured)

• Restricted to the policy amount

• Loss of stock x sum insured / Insurable amount (Total Cost)

• None of the above

What is the amount of claim for partial loss of goods partially destroyed without average clause?

• Actual loss

• Sum insured

• Loss of stock x sum insured / Insurable amount (Total Cost)

• None of the above

What does the Loss of Profit Policy cover?

• Loss of net profit

• Any increased cost of working

• Both A and B

• None of the above

How is the value of stock on the date of fire calculated?

• By building up a Trading Account as from the date of last accounting year

• By estimating the value of stock if stock records are not available or destroyed

• By obtaining information from customers and suppliers

• All of the above

What is the value of stock salvaged in the second illustration?

• ₹5,800

• ₹10,500

• ₹11,200

• ₹21,700