 LOSS OF PROFITS INSURANCE 
PROPOSAL FORM
In completing the Proposal Form please ensure that questions are answered fully and accurately
and where necessary schedules giving further explanation are provided.
IMPORTANT NOTICE CONCERNING DISCLOSURE
It is your duty to disclose all material facts to Underwriters.
A material fact is one that is likely to influence an Underwriter’s judgement and
acceptance of your proposal. If your proposal is a renewal of an existing policy,
it should also include any change in facts previously advised to Underwriters. If
you are in any doubt as to whether or not facts are considered material, you
should disclose them.
1. (a) Name of Proposer:
…………………………………………………………
(b) Mailing Address:
(including Postal Code)
…………………………………………………………
…………………………………………………………
…………………………………………………………
(c) Telephone No./Fax No.:
…………………………………………………………
(d) Email address:
…………………………………………………………
(e) Nature of business:
…………………………………………………………
(f) Address of Premises occupied by Proposer
(See Note 6)
…………………………………………………………
…………………………………………………………
…………………………………………………………
(g) Period of Insurance:
It is recommended that renewal be arranged at
a date 2/3 months after the end of your financial
year.
From
…………………………………………………………
To………………………………………………………
ITEMS TO BE INSURED
SUM INSURED
1. On Gross Profit (See Notes 1 to 4 (a))
$
2. On Total Wages for the first …………………………..
weeks followed by
…………………. % for the
remainder of the
Indemnity Period (See Note 4 (b)
)
3. On ………………….. Weeks' Wages to the extent of
………………………… % of the total wage roll
(See Note 4 (c) )
INDEMNITY
PERIOD
months
$
$
weeks
$
4. On Accountants' Charges (See Note 5)
$
Note 1 (a) SPECIFIED WORKING EXPENSES - Please indicate Working Expenses to be excluded:
Wages (if insured separately by Items 2 or 3); Discounts allowed; Bad Debts; Packing; Carriage;
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
or ALTERNATIVELY
Note 1 (b) INSURED STANDING CHARGES - Please indicate Standing Charges to be insured,
amending, deleting or adding as required:- Directors' Fees and Remuneration; Salaries including State
Insurance Contributions; Rents and Rates; Auditors and Legal Fees; Insurance Premiums; Depreciation
of Buildings, Machinery, Plant and Motor Vehicles;
……………………….…………………………………………………………………………………………..……
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
EXTENSIONS - Please indicate any Extensions required. (See Note 6)
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
ADDITIONAL PERILS - Please indicate any Additional Perils to be included. (See Note 7)
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
2. How long has the business been established?
……………………………………………………………
3. When does your financial year end?
……………………………………………………………
Massy United Insurance Ltd.
Page 2 of 7
4. Name and Address of your Auditor
5. Have you at present any Insurance covering
Loss of Profits?
……………………………………………………………
……………………………………………………………
……………………………………………………………
Yes
No
……………………………………………………………
……………………………………………………………
……………………………………………………………
If ‘Yes’ give details
6. Has any Office declined a Proposal made by
you for Insurance against Fire or Loss of
Profits?
If ‘Yes’ state particulars
7. Have you ever made a claim under a Fire
Policy or Loss of Profits Policy?
If ‘Yes’ give details
Yes
No
……………………………………………………………
……………………………………………………………
……………………………………………………………
Yes
No
……………………………………………………………
……………………………………………………………
……………………………………………………………
8. Name of Company insuring the Contents of
your premises
……………………………………………………………
……………………………………………………………
9. Total Fire Insurance by Annual Policies on
Contents
$ ……………………………………… Annual Premium
$ ……………………
paid thereon
SIGNING THIS PROPOSAL DOES NOT BIND THE PROPOSER TO COMPLETE THIS INSURANCE.
Declaration
I/We declare that the statements and particulars in this proposal are true and that no material facts have
mis-stated or suppressed after enquiry. I agree that this proposal, together with any other information
supplied shall form the basis of any contract of insurance effected thereon. I/We undertake to inform the
Insurers of any material alteration to those facts occurring before the completion of the contract of
insurance.
Signed by Proposer
Name (Please print)
……………………………………………………………………………………………
Signature
……………………………………………………………………………………………
Date
……………………………………………………………………………………………
Massy United Insurance Ltd.
Page 3 of 7
FOR OFFICE USE ONLY
Basis Rates
Fire & Lightning
Item
1.
Sum Insured
I.P. & %
Profits
Rate
Annual
Premium
Gross Profit
Extra Perils:
TOTAL
First Premium
Less discount
Less returns
Initial Period …………………………… to ……………………………Returns under …………………………
Memos 3 …………………………………………… 6 ………………………………………………………
4 …………………………………………… 7 ………………………………………………………
5 …………………………………………… 8 ..……………………………..………………………
Massy United Insurance Ltd.
Page 4 of 7
This page is to assist in completing the proposal form and may be detached and retained by the
Proposer.
ITEM 1. GROSS PROFIT
EXTRACTS FROM THE ACCOUNTS OF THE BUSINESS FOR THE LAST FINANCIAL YEAR.
The sum of
and
(a)
Turnover (less discounts allowed)
(b)
Closing Stock
From which deduct the sum of
(a)
Opening Stock
(b)
The following Specified Working Expenses (i.e. those which
vary directly with Turnover)
(i)
Purchases (less discounts received)
(ii) Wages (if insured by Item 2 - see note below)
(iii)
(iv)
Annual Gross Profit
Adjust for current trend of business (see page 1)
Maximum Indemnity Period required …………………………… months (see Page 1)
If exceeding 12 months, increase sum insured proportionately
Sum to be Insured on Gross Profit
ITEM 2. WAGES
It is considered that the services of some employees could temporarily be dispensed with, a limited form of Wages
Insurance can be arranged by a separate item, using the Dual Basis method. Such an item is available only in
conjunction with an insurance on Gross Profit with an indemnity period of not less than 12 months, and it will then be
necessary to exclude Wages from the Gross Profit item.
The Sum Insured should be based on the total annual remuneration (including National Insurance Contributions, (if
applicable), Holiday Pay, Bonuses and other payments pertaining to wages) of all Employees other than those
normally treated as "Salaried" - e.g. those engaged on executive, managerial or administrative duties.
COVER REQUIRED
100% for …………………………… weeks (minimum 4 weeks)
……………………………… % for remainder of Indemnity Period (minimum 10%)
Annual Wage Roll
Adjust for current trend of business (see Page 1)
If Indemnity Period exceeds 12 months, increase sum insured proportionately
Sum to be Insured on Wages
ITEM 3. PROFESSIONAL ACCOUNTANTS CHARGES
Professional Accountants Charges for producing and reporting on any particular or details required by
the Company in connection with a claim
Massy United Insurance Ltd.
Page 5 of 7
INSURANCE AGAINST LOSS OF PROFITS FOLLOWING FIRE - EXPLANATORY NOTES
1. GROSS PROFIT
(a) The sum to be insured should represent the amount by which
(i)
the sum of the turnover and the amount of the closing stock shall exceed
(ii) the sum of the opening stock, the amount of stock purchased and the amount of the Specified Working
expenses. If the selected Indemnity Period is 12 months or less, the annual amount of Gross Profit
should be insured; for Indemnity Periods exceeding 12 months the sum insured should represent the
anticipated Gross Profit for the period selected. In the estimation of the Gross Profit the trend of the
business should be taken into account, bearing in mind that it is the Gross Profit which would have been
earned during the twelve months (or longer indemnity period selected) following a fire had the fire not
occurred, which should be insured.
(b) As an alternative, the sum insured may be based upon the total of the anticipated annual amount of the
Insured Standing Charges added to the estimated annual Net Profit (before deduction of any Government
taxation on profits). The lists printed on page 1 of Specified Working Expenses and of Insured Standing
Charges are intended only as guides. The names of the Charges to be mentioned in the policy wording
should correspond with the headings in the accounts of the business.
2.
REBATE CLAUSE - If at the end of your financial year the sum insured on Gross Profit proves to have been in
excess of the certified Gross Profit earned, a return of premium limited to 50% will be made in respect of the
excess. For this reason you are recommended to include a substantial margin in the sum insured in order that
you are not penalised by underinsurance when a loss occurs. To facilitate the adjustment it is suggested that
renewal be arranged at a date 2/3 months after the end of your financial year.
3.
INDEMNITY PERIOD - This is the maximum period immediately following a fire during which the policy will
provide indemnity under the respective items.
For Items 1 and 2 you should select the period you estimate would be necessary for the business to recover
entirely from the effects of any fire.
For wages cover under Item 3 the period should be selected to meet your particular needs. (See Note 4 (c))
4.
WAGES
(a) ITEM 1 - If your business is such that all employees would be retained for the full indemnity period, then all
wages should be insured under the Gross Profit item either by not including wages as a specified working
expense under Item 1 or by including wages as a standing charge under that item.
(b) ITEM 2 - If the full cover under note (a) is necessary, you may decide to insure the Wages of all employees
for an initial period but thereafter to insure only a percentage of the wage roll for the remainder of the
Indemnity Period chosen for the Gross Profit item. Provided:
(i) the indemnity period relating to the Gross Profit cover is 12 months or longer;
(ii) the initial period where 100% wages cover operates is at least 4 weeks;
(iii) a minimum of 10% of the total wage roll is to be insured after the initial period; the most satisfactory
cover of this kind is granted by Item 2 under which you have the option, at any time after damage has
occurred, of converting the wages cover to 100% of the wage roll for an extended initial period, the
cover thereafter being any savings effected during the initial period. Details of cover required under this
arrangement should be entered under Item 2 on page 1, the sum insured being the wages relating to
the indemnity period selected for Item 1.
(c) ITEM 3 - In some few businesses it may be considered unnecessary to protect the wage roll fully and in
such cases cover can be provided for a period of weeks. The sum insured should represent the wages of
employees concerned for the period selected.
The rebate system also applies to items covering wages and it is recommended that wages sums insured also
should include generous margins to allow for increasing trend or special circumstances. In all cases the sum
insured should provide for all payments associated with wages such as State Insurance Contributions, Bonuses,
Holiday Pay and the like.
Massy United Insurance Ltd.
Page 6 of 7
5.
ACCOUNTANTS' CHARGES - In the event of a claim under the policy it would be necessary for your
Accountants to produce the figures which would be required in the preparation of the claim. Their charges for this
work (which would be additional to their normal auditing of the Accounts) can be provided for by a special item,
the sum insured representing your estimate of the charges likely to be incurred.
6.
EXTENSIONS - to cover Loss of Profits consequent upon Fire elsewhere than on premises occupied by the
Proposer may be incorporated in the insurance:
(i)
Suppliers' premises from which components, goods or materials are obtained or where they are
manufactured or processed
(ii)
Electricity Stations, Gas and Water Undertakings from which the Proposer obtains electric current, gas
and water.
(iii) Premises where property of the Proposer is stored.
(iv) The property of the Proposer whilst in transit.
(v) Motor Vehicles belonging to the Proposer whilst on the road.
(vi) Premises where a Contract is being carried out.
(vii) Preventing or hindering access to the Proposer's premises.
7.
ADDITIONAL PERILS - If your Fire Policy is extended to include any additional perils, similar provisions can be
made under your Loss of Profits policy. Quotations for the inclusion of Additional Perils will be supplied on
request.
Loss of Profits Insurance
A LOSS OF PROFITS POLICY SECURES INDEMNITY AGAINST LOSS OF GROSS PROFIT FOLLOWING
REDUCTION IN TURNOVER (or other appropriate Standard) AND INCREASE IN COST OF WORKING
...................................................... necessarily incurred to maintain or restore Turnover (as for example renting
temporary premises, having work done elsewhere, overtime or extra labour and special advertising) RESULTING
FROM FIRE ................................................................................................... which normally includes Lightning
and Explosion of Gas used for domestic purposes or used for lighting or heating the building.
FIRE INSURANCE
Protects the Capital represented by your Buildings, Machinery and Stock
PROFITS INSURANCE
Protects the earning capacity of that Capital by making good the loss of your Net Profit, enabling you to
meet
overheads and defraying increase in expenditure.
Without both Fire and Profits Insurance you are not adequately protected against the effects of a fire.
Premiums for Profits Insurance vary according to the "Indemnity Period" (the number of months during which you
desire to be indemnified following a fire) and the nature of the business carried on by the Proposer.
Massy United Insurance Ltd.
Page 7 of 7