Question No.

1
From the following particulars, you are required to calculate the amount of claim
for Build well Ltd., whose business premises was partly destroyed by fire:

Sum insured (from 31st December 2011) `4,00,000

Period of indemnity 12 months
Date of damage 1st January, 2012
Date on which disruption of business 31st October, 2012
ceased

The subject matter of the policy was gross profit but only net profit and insured
standing charges are included.
The books of account revealed:
(a) The gross profit for the financial year 2011 was ` 3,60,000.
(b) The actual turnover for financial year 2011 was ` 12,00,000 which was also the
turnover in this case.
(c) The turnover for the period 1stJanuary to 31stOctober, in the year preceding
the loss, was ` 10,00,000.
During dislocation of the position, it was learnt that in November-December
2011, there has been an upward trend in business done (compared with the
figure of the previous years) and it was stated that had the loss not occurred, the
trading results for 2012 would have been better than those of the previous years.
The Insurance company official appointed to assess the loss accepted this view
and adjustments were made to the pre-damaged figures to bring them up to the
estimated amounts which would have resulted in 2012.
The pre-damaged figures together with agreed adjustments were:
Pre- Adjustment
damaged Adjusted standard
Period To be
added turnover
figures
` ` `
January 90,000 10,000 1,00,000
Feb to October 9,10,000 50,000 9,60,000
November to 2,00,000 10,000 2,10,000
December
12,00,000 70,000 12,70,000
Gross Profit 3,60,000 46,400 4,06,400

Rate of Gross Profit 30% (actual for 2011), 32% (adjusted for 2012).
Increased cost of working amounted to ` 1,80,000.
There was a clause in the policy relating to savings in insured standard charges
during the indemnity period and this amounted to ` 28,000.
Standing Charges not covered by insurance amounted to ` 20,000 p.a. The annual
turnover for January was nil and for the period February to October 2012 `
8,00,000.
Question No. 2
Mr.Share reported stock of Rs.30000 as on that date of accident. He had taken
fire insurance policy on inventories for Rs.20000 that contains co-insurance
clause of 80%. He also reports damage and loss of stock of Rs.10800. How much
the insurance company pay for the loss?
Question No. 3
Stock damaged in a fire accident is Rs.100000. Closing stock at the time of fire
was Rs.150000. Damaged stock was not taken over by the insurance company.
The insured had sold with the consent of the insurance company, damaged stock
for Rs.45000. The policy taken by the insured was Rs.120000. Find out the final
claim of the insured taking into account all the above data.
Question No. 4
Monalisa & Co. runs plastic goods shop. Following details are available from
quarterly sales tax return filed.
Sales 2009(`) 2010(`) 2011(`) 2012(`)
From 1 January to 31st March
st
1,80,000 1,70,000 2,05,95 1,62,000
0
From 1st April to 30th June 1,28,000 1,86,000 1,93,00 2,21,000
0
From 1st July to 30th September 1,53,000 2,10,000 2,31,00 1,75,000
0
From 1st October to 31st December 1,59,000 1,47,000 1,90,00 1,48,000
0
Total 6,20,000 7,13,000 8,19,95 7,06,000
0

Period (`)
Sales from 16.09.2011 to 34,000
30.09.2011
Sales from 16.09.2012 to Nil
30.09.2012
Sales from 16.12.2011 to 60,000
31.12.2011
Sales from 16.12.2012 to 20,000
31.12.2012

A loss of profit policy was taken for `1,00,000. Fire occurred on 15th September,
2012. Indemnity period was for 3 months. Net Profit was `1,20,000 and standing
charges (all insured) amounted to `43,990 for year ending 2011.
Determine the Insurance Claim?