Sum Insured in Consequential Loss Policy should be an estimate of Loss of Gross Profit for the period that company anticipates to get its operations back to normal. This period starts from the day the damage to the property has taken place.
The maximum period of indemnity in Consequential Loss Policy would be 3 years.
Gross Profit = Net Profit + Standing Charges
Net Profit can be calculated based on any one of the following
- Turnover of company
- Revenue of company
- Output of company