Which type of policy should a factory owner obtain to cover potential loss of trade due to a fire at their premises?

A Business Interruption policy is specifically designed to cover the financial losses that a business can incur due to a temporary closure or reduced operations caused by an insured event, such as a fire. In the case of a fire at a factory, not only could the physical assets be damaged, but the operation of the business could be significantly disrupted, leading to loss of revenues.

This type of policy provides coverage for ongoing costs, such as employee wages and fixed expenses, even when the business is not generating income due to the incident. It supports the factory owner in maintaining financial stability during a recovery period, allowing the business to resume operations once it has been repaired.

Other types of policies, like Commercial all risks or Fire and special perils, primarily focus on covering the physical assets themselves rather than the income loss incurred during the business interruption period. Products Liability pertains to covering damages related to products sold by the factory, which does not relate to the impact of a fire on operational revenues.