Business Interruption from Burglary

At 8am, Monday 2 December 2002, Ms Ruby Rosel of Rage Designs arrived for work to discover every garment from her exclusive women’s fashion store had been stolen.

Police investigations indicated unknown intruders forcibly gained access to the building, disabled back to base alarms and loaded a waiting truck with Rage’s stock.

Distraught, Ruby contacted her insurance broker and advised him of the loss. As expected her broker advised her the stock loss was restricted to a sub limit - but what about the loss of profit?

Rage was in the midst of the Summer fashion season for 2002/03 and the annual peak Christmas sales critical for cash flow was fast approaching.

Designers were now marketing stock for Autumn/Winter 2003 and the Summer 2002/03 fashions could not be replaced.

Rage was insured under an Industrial Special Risks cover. This responds to the Loss of Profit flowing from a property loss under the Material Damage section of the policy provided the event is not excluded.

Burglary was not an excluded peril and the Loss of Gross Profit associated with the Summer 2002/03 season was calculated. The claim was settled.

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Author

Published with permission of Claim Solutions Pty Ltd.

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Insurance Policy

Country: - Australia.

Policy Description: - Mark IV Industrial Special Risks (ISR) policy.

Insurer: - Not Supplied.

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