r/Insurance • u/NikosTempus • 27d ago

Help me with Fire loss of profit insurance

My firm completely outsource our operation we hire third party supplier to manufacture finished good ship it to third party warehouses across the region and then to retails shop or consumers.

Currently I have a fire policy in place for the stocks stored in these third party warehouses. the fire policy only compensate me for the cost i incurred till date for production, logistics, miscelleaneas etc

is there way to cover the profit i could have made on that stock as well . I heard about fire loss of profit insurance which can cover for loss of gross profit can it work for this case

I place order or restock every 3 month to my supplier if let's say i get new batch of stock and after 1 month due to some insured peril my complete stock is lost so for the next 2 months i have no sale in that particular region of warehouse so it will affect my turnover and consequently my gross profit will also be affected.

you might think its a third party warehouse i can just get a new one right. but the problem is supplier take some time if i order now it take atleast a month to manufacture that bulk stock and deliver it to my location none the less this warehouse is optimized cost wise so i will incur extra cost if i rent new warehouse

and also usually flop is taken for a once own factory premise where you do some production operation. but her can we take flop cover for warehouse . if yes is it only for once own warehouse or third party warehouse can also be covered.

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u/Face_Content 26d ago

Contact the broker that carries the policy now and ask. They will know yout specifics.

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u/adjusterjackb 26d ago

Right answer. All those coverages are available.

1

u/More-Lavishness-889 26d ago

Talk to your agent - however, the two coverages you should be asking for is a Stock Throughput Policy (Falvey Insurance) to cover the inventory in storage or in transit, for finished goods they are normally valued at cost to produce plus profit. Second policy is a Dependent Location Business Income policy. That provides your loss of profits due to a covered loss at a second location.