The primary goal is to restore you to the same financial position you were in before the loss—no better, no worse. This prevents policyholders from profiting from a disaster.
Before delving into the specifics of property and pecuniary risk, it is essential to acknowledge the seven fundamental principles of insurance that apply to both categories. These form the legal bedrock of any insurance contract: Principles Of Property 745 And Pecuniary Insurance
Fire (insured peril) destroys servers. Recovery takes 4 months. During that time, the CFO embezzles £50k. The primary goal is to restore you to
This is devastating. Because pecuniary values fluctuate (turnover changes monthly), many businesses underinsure inadvertently. If your Gross Profit is £2M but you only insured for £1M, even a small disruption costs you dearly via the Average clause. These form the legal bedrock of any insurance
Review your Property and Pecuniary policies annually. Ensure the declared values reflect current replacement costs and true gross profit. Only then will the principle of indemnity serve its purpose—to bring you back, exactly, to where you were before the loss.
Is the pecuniary loss directly caused by the fire?