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For example , in the loss of profit The insured amount for 6 months is 125000 And the insurable amount is found on calculating Gross profit multiplayed with adjusted annual turnover. And we see the product of that calculation is out of 12 months turnover Since the insurance company has told to they will cover only for six months . Why should we have insured for entire years profit and pay insurance premium. And compare six months of profit claim 12 months profit
Answers (1)
Practically, insurance policies are taken on yearly basis. Hence, yearly figures are considered. Indemnity period is the period within policy period for which insurance company becomes liable to compensate. So, by taking a policy business insures itself for a year. However it gets compensated, only for the loss during period of indemnity.
