What is included in gross profit for insurance purposes?

[jimbo61]

Hi guys,

this may seem like an odd question, but apparently the business definition and insurance definition of gross profit are different and I am trying to discover how.

I know we can include the food purchased, the staff to prepare and serve the food, plus gas and electricity to do so.

The grey area for me is insurances, are they included in gross profit as a cost or not? Also is premises rental?

If anyone can point me in the right direction, it'd be most appreciated.

thanks

 

[sch4479]

So, yeah, gross profit definitions can vary depending on the context. In basic business terms, gross profit is usually just your revenue minus the cost of goods sold (COGS),which might include raw materials and direct labor costs. It doesn't typically account for operating expenses like rent, utilities, or insurance.

But in insurance, gross profit often does include those other costs because they're looking at your overall exposure and how much money you would need to get back on your feet in case of a loss. So, in the insurance context, you'd likely see things like utilities and maybe even insurance premiums included in gross profit calculations.

You might want to consult a financial advisor or insurance broker for your specific case, though, just to be sure.