Machinery Loss of Profits Policy
This policy is to protect the Insured from losing revenue and consequent Gross Profit resulting from the cessation of business due to accidental damage or loss of machinery/equipment
- Also called Consequential Loss or Business Interruption policy
- It is a financial loss as a result of physical loss or damage. This policy envisages covering this financial loss
- This policy cannot be issued without there being a Machinery Policy
- Both policies will cover identical machinery and identical perils
- What is covered: Loss of Gross profit (Net profit + standing charges) resulting from interruption of business owing to the breakdown of any items covered under the Machinery Policy
- Indemnity period: This is the period for which the policy will compensate the loss of gross profit. This needs to be chosen and declared by the Insured. It is advised to choose such period which would be required to repair/reinstate the property and operations in case of breakdown of the most critical machinery/equipment
- Interruption period (Indemnity period) starts from the day of the accident and lasts for so many days as mentioned in the policy
- Sum Insured: Estimated Gross profit for the indemnity period chosen by the Insured.
