Consequential losses following a breakdown of machinery, plant or equipment due to a sudden or unforeseen event can sometimes be worse than the extent of the physical damage. Production and business operations may cease. However, fixed expenses such as salary, wages, interest on capital, rent etc, will continue to be incurred, resulting in the loss of gross profits and increased cost of working during the interruption period.
Machinery Loss of Profits Policy protects the insured by indemnifying the loss in gross profits and the increased cost of working during the interruption period in such contingencies as stated above. The Machinery Loss of Profits Policy can only be issued when the machinery breakdown cover is in place.
Premium calculations are based on factors such as total turnover, estimated gross profits, period of indemnity, voluntary time excess, nature and type of risk, location, industry experience , previous loss history etc.