Question

The average clause in a loss of profits policy
protects the interest of the​

Answer 1

Explanation:

The average clause in the loss of profit policy is made to protect the full loss of the person doing the investment or insurance. In this case of a loss, the insurance person will bear a proportion of any loss if his assets were insured for less than their full replacement value. So this basically protects the person who has gone for insurance of his assets according to average clause

Answer 2

It protects the interest of an insurer.

• The policy is designed to compensate for the possible monetary loss resulting from a cease in enterprise operation caused by a physical loss of property caused by an insured incident.
• The clause is usually included in the fire policy so that the firm does not underinsure the house.
• However, the clause can not be applied when the entire claim exceeds the total gross profit of annual turnover