Machinery Loss of Profits Insurance Policy (MLOP)

All perils under the Machinery Breakdown policy can be covered under Machinery Loss of Profits Insurance Policy (MLOP).

The main perils covered are:

The amount payable as indemnity is in respect of reduction in turnover/output is the gross profits lost on account of the shortage in turnover or output during the indemnity period in consequence of the material damage under Machinery Breakdown policy.

Sum insured:

The sum insured is to be declared as annual gross profits estimated during the policy period.

This can be arrived at by either considering gross profits on difference basis which is (Revenue – Variable Expenses) or additions basis which is Net Profit + Standing Charges.

The premium will depend on the following factors:

Exclusions:

The underlying Material Damage policy for this MLOP cover would be Machinery Breakdown policy. Hence all the exclusions of the Machinery Breakdown policy would be applicable for MLOP cover.

The major exclusions will be :