Consequential Loss
Products - General



Also known as Loss of Profits

The normal certificate is limited to cover on material or capital loss but does not include losses in earning power, i.e. profits due to partial or complete cessation, standing charges and increased cost of working as a result of fire and/or other extended perils.


The certificate provides indemnity for the following:

  1. Net Profit
  2. Standing Charges (i.e. those expenses that continue to exist at usual levels although business has been interrupted by fire e.g. Motor Vehicle expenses)
  3. Increased cost of working (e.g. overtime, rental of alternative premises or machinery, etc)
     

This cover does not become operative unless the material damage claim is paid or liability is admitted in respect of such damage.

Therefore, it is important to ensure that the scope of cover under both the Material Damage (e.g. Fire Takaful) and Loss of Profits Takaful are identical.

Consequential Loss Takaful may not be issued unless Fire Takaful with scope of cover is also effected with the same Takaful Operator.