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baner What is the difference between ALOP.webp

What is the difference between ALOP (Advance Loss of Profits) and the War & Terror coverage under the State fund?


A: the State of Israel has undertaken to compensate its citizens for direct and indirect damages caused as a result of acts of hostility or war operations. The compensation is made under the Property Tax and Compensation Fund Law, 1961.Under the same law, compensations are also paid for damages caused by drought in different geographic regions.

Since there are no definitive information that has been brought to the public's attention, i.e. type of compensation, to whom compensation will be given and its amount, I can't provide concrete information.

Hereunder some general information as known for now:

Q: Would you be able to further explain the difference between ALOP (Advance Loss of Profits) for a Project Owner or Contractor, and the War & Terror coverage under the State fund?

For direct damage, the state compensates the injured party according to the amount of damage caused directly by the impact, for example: a direct hit by a missile on a house, factory, vehicle, etc., when actual damage is caused to the property according to the assessment of loss adjuster acting on behalf of the state of the amount of damage caused. This is the 'actual damage' - which is, the difference between the value of the property before the damage and the value of the property after it.


There is no dependence on the place where the damage was caused, as long as direct damage was caused - the state compensates. "There is a maximum ceiling for the amount of compensation to which one is entitled for damage to household objects, while no compensation is given for objects of art, jewelry, etc.


How does the state compensate for direct damage?

For indirect damage, a claim can be filed in accordance with the formula established by the property tax and compensation fund, and which will be published in the future.


It should be emphasized that the Tax Authority publishes the map of the areas in Israel that are entitled to compensation for indirect damage, in accordance with the instructions of the Home Front Command during the fighting, when only indirect damage to businesses conducted in the areas will be included In the map published by the Tax Authority, will receive compensation.


The claim must be submitted after the fighting ends and/or after the Tax Authority publishes the criteria for submitting the claims, the way of submission and those entitled to submit it.


How does the state compensate for indirect damage?


It is not known how compensation for the Iron Swords War will be decided due to the extent of the damage and damage to businesses throughout the country, but from past experience it seems that the Tax Authority will publish a formula according to which businesses will be compensated for loss of income during the fighting period according to the region where the business exists and the difference in the turnover of transactions in the business between the year preceding the war for the year of the war.

It should be emphasized that the state does not fully compensate the indirect damage in the whole country but only in the parts defined by the tax authority as entitled to compensation and in accordance with the criteria that will be determined.

Enclosed please find a few useful links:

What about compensation for loss of income?

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