Scenario:
Mr. Pao opened a dried seafood shop in Wing Lok Street in Sheung Wan 6 months ago. To celebrate his exceptionally good business turnover, he temporarily closed his shop for 5 days and went to Thailand with his workers. However, there was unforeseen heavy rain in Hong Kong during his 5-day trip, which resulted in some of his abalone becoming waterlogged.

Question:
Can Mr. Pao successfully claim under shop insurance?

Answer:
Although Mr. Pao did not take out any preventive measures against flooding, if he has taken out a shop insurance policy, he can probably claim the damage to his shop's fixtures and fittings, as well as the loss of stock, under the Contents and Stock section.

In addition, Mr. Pao can claim his loss of profit due to his Reduction in Takings and Increase in Cost of Workings, i.e. the additional expenditure necessarily and reasonably incurred for the sole purpose of avoiding or diminishing the reduction in takings) under the Business Interruption section.

With the rainy season approaching, if your customers are the owners of a dried seafood shop in Sheung Wan, you can advise them to pay special attention to possible flooding or water damage, and to take preventive measures to minimise any loss.

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