Specific deductions: insurance: loss of profits
Premiums on policies insuring against loss of profits from the following contingencies are allowable deductions in computing trading profits:
- a fire at the business premises (as happened in the Canadian case of British Columbia Fir and Cedar Lumber Co Ltd  AC 441)
- interruption or loss of use of income-producing assets such as business premises or plant and machinery
- interruption or cessation of the supply of raw materials, stock, water supply, fuel, etc. needed to carry on the business
- events causing loss of profits for a temporary period (see Mallandain Investments Ltd v Shadbolt  23 TC 367)
Guidance on policies insuring against loss of profits resulting from the death, sickness, accident or injury of an employee or director (including ‘keyperson’ policies) is at BIM45525 onwards.