One of the difficulties in establishing a sum insured is that the definition of ‘gross profit' in an insurance policy is different from accountants and other business people. For brokers, there are a number of key elements to consider when setting a gross profit sum insured. Miscalculating gross profit has increasingly led to brokers facing costly negligence claims with market reputational issues.
This article can help brokers identify factors to consider in calculating gross profit and, in turn, help to identify where prospects have a defective gross profit sum.
• Defining gross profit for insurance purposes.
• Uninsured working expenses examples.
• A common pitfall - wage roll.
• Considering partial losses.