Machinery Loss of Profit Insurance Policy

Accidents, breakdown or failure of machinery critical to an industrial or manufacturing unit can hamper operations thereby resulting in losses. These critical units like boilers, pressure vessels or any other essential machines can be covered under the Machinery Loss of Profit Insurance Policy. Under this protecting solution, the business is protected from losses/decrease in turnover arising due to unanticipated physical damage to machinery.

A Machinery Loss of Profit Insurance Policy can help your business bounce back from loss of profit. This policy is a suitable for Small and Medium Enterprises (SMEs) and Corporates looking to protect machinery essential to their business.

Features of the Machinery Loss of Profit Policy

• Under this insurance policy, your business is protected from financial losses that may occur due to breakdown or failure of essential machinery.
• This solution additionally offers exhaustive coverage along with our Machinery Break Down Policy for all risks associated with boilers, pressure plants and industrial machinery.
• Other extensions/add-on covers are available to cover wages and auditor fees.

Coverage under the Machinery Loss of Profit Policy

The Machinery Loss of Profit Insurance Policy is issued in conjunction with the Machinery Breakdown Cover. In the event of any interruption to your business resulting from damage to your machineries due to any peril insured under the Machinery Breakdown Policy, this policy enables you to recover:

• Loss of Gross Profit due to a reduction in turnover
• Increased Cost of Working incurred in minimising that loss of Gross Profit
• This policy can also be extended, at an additional premium, to cover the cost of wages and auditor fees.

Key Benefits under this policy

• A flexible policy to cover a wide range of businesses.

  Machinery types can vary across businesses, that is why the Machinery Breakdown Policy provides comprehensive coverage for various kinds of commercial grade machinery.

• Protection against Business Interruption following breakdown by accidental damage.

  Heavy dependence on machinery for business operations can lead to heavy losses in profit if the machine is damaged or needs repair or replacement – the Machinery Loss of Profit Insurance Policy provides coverage from such losses.

Exceptions under the Machinery Loss of Profit Insurance Policy

• Pre-existing damage to machinery

  Machinery types can vary across businesses, that is why the Machinery Breakdown Policy provides comprehensive coverage for various kinds of commercial grade machinery.

• Damage caused due to experimental usage

  Any sort of losses caused due to damage to machinery caused from experimental usage i.e. using processing material that is not suited to the machine, usage of machine beyond its recommended hours or capacity etc. are not covered under this insurance policy.

• War and nuclear perils

  Loss of profit due to disruption in factory operations because of political unrest, war like conditions, nuclear testing in nearby locations etc. are not covered under this insurance policy

• Wilful acts or neglect

  Breakdown of machines due to intentional damage or weathering due to neglect are not covered under the Machinery Loss of Profit Insurance Policy.

Sum Insured and Premium

The sum insured for the Machinery Loss of Profit Insurance Policy is determined on the basis of an estimate of gross profit i.e. net profits plus standing charges like customs duty, freight etc. The premium for this policy will be dependent on sum insured and other factors like time required to repair or replace a machine, availability of spare parts and the agreed upon indemnity period.