Question 1: Explain the significance of ‘Average Clause’ in a fire insurance policy

Question 2: On 15 July 2019, a fire occurred in the premises of Super Paper Recyclers SAOG. Most of the stocks were destroyed.

Cost of stock salvaged being RO 51,200. In addition, some stock was salvaged in damaged condition and the value of that stock (in damaged condition) was agreed at RO 50,500.\\\\

The following information is available from the books of accounts.

His stock at the close of account on 31-dec-2017 was valued at RO. 133,500

His purchases from 1-1-2018 to 12-6-2018 were RO 162,000 and sales during that period was RO 204,000.

The average rate of gross profit is 25 % on sales.

Ahmed has insured his stock at RO 110,000.

Calculate the amount of claim.