Loss
of Profit following
Machinery Breakdown
Insurance
Loss of Profit following Machinery Breakdown
Insurance
Damage to machinery will cause interference to the
production. In cases where critical machineries are
affected, the factory can suffer severe stoppages.
This will result in loss of earnings whilst standing
charges continue to be incurred. This form of
insurance provides cover against loss of gross
profit following indemnifiable damage to machinery.
In the majority of cases, the loss of gross profit
out of damage to machinery far exceeds the cost of
repair or replacement.
Cover
The policy covers loss of Gross Profit
following an indemnifiable accident (the cover
usually follows that of the machinery breakdown
policy) and is measured on the reduction in turnover
compared to the same period in the last twelve
months and applying the Rate of Gross Profit. Cover
also extends to include Additional Expenditure
reasonably incurred to minimise the loss of Gross
Profit. The costs of non productive wages can be
included either as treating them as a standing
charge, or taking out more specific covers such as
Dual Wages. Professional accountants' charges to
produce certified details for the Insured's
presentation of a claim can be included.
Major Exclusions
a.
Loss or damage due to fire
and extraneous perils.
b.
Loss or damage due to the
imposition of abnormal conditions directly
or indirectly from testing, intentional
overloading or experiments.
c.
Loss or damage for which a
supplier, contractor or repairer is
responsible either by law or under contract.
d.
Loss or damage caused by any
faults or defects existing at the time of
commencement of this policy with in the
knowledge of the Insured or his
representatives, whether such faults or
defects were known to the Insurers or not.
