The consequential loss or ‘loss of profits’ policy generally takes over from where the fire policy leaves off. Fire policy indemnifies the insured fully against material damage incurred, not considering that as a result of the fire, it may take a while before the business is fully operational.
Consequential loss covers the “increase in cost of working” which includes a reduction in gross profit and any expenses incurred with the Company's’ approval in adopting emergency and temporary measures to continue with the insured’s business e.g. renting temporary accommodation, hiring second-hand equipment etc in order to diminish the loss
