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Question

If the policy is without average clause, a claim for loss of profit will be?

A Sum insured. Correct Answer Incorrect Answer
B Actual Loss Correct Answer Incorrect Answer
C Higher of actual loss and sum insured Correct Answer Incorrect Answer
D Lower of actual loss and sum insured Correct Answer Incorrect Answer
E None of these Correct Answer Incorrect Answer

Solution

In policies without an average clause, the insurance company will typically pay the lower of the actual loss suffered by the insured or the sum insured amount. This helps prevent overcompensation and ensures that the claim amount is reasonable and aligned with the terms of the policy.

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