Claim procedure under Consequential Loss of Profit (CLOP) Policy
This policy which has defined the procedure to assess the loss under different basis (Turnover, Output or Differential) the policy can be issued. But the Surveyors always have their own procedure ignoring what is defined in the policy as a result the Insured feel cheated and repent from taking CLOP policy. Under the policy, the loss is defined as the difference of standard turnover/output of the corresponding period and indemnity period, but the Surveyor moves one step ahead and ask Insured to prove that the necessity of production/ turnover and show to the Surveyor the confirm order for which the production is to take place and on non production of these records the claim is repudiated or assess the loss at “No Loss’ but this procedure is nowhere defined in the policy. Every manufacturing unit is working on “On Going Concept” (Accounting Principles/Rules) and produce the goods whether the unit is having the confirm order or not. CLOP is being highly technical concept and the Insurer who has issued the policy wordings does not overrule the wrong interpretation of the policy wording by the Surveyor.
If you come across such problem, kindly argue with the Surveyor and request him to interpret the policy as defined therein and sure your arguments will prevail.