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Machinery Loss of Profit Insurance

Scope of cover
• Indemnifies the actual loss of gross profit sustained as a result of a business interruption caused by an accident    covered under Machinery insurance.
• MLOP insurance compensates for:
    • The continuing business expenses (standing charges) including the salaries and wages paid to employees
    • The net profit
    • The increase in cost of working, i.e. the additional expenditure necessarily and reasonably incurred for avoiding       or diminishing a reduction in turnover.

Indemnity period
• The maximum time for which an insurer is liable for the loss of profit, generally 6 or 12 months

Time excess
• The number of days of interruption which has to be borne by the insured in the event of a loss, generally 3,7 or 14    days minimum 24 hours

Underwriting considerations:-
• General and specific technical risk of the machinery to be insured.
• Moral and technical hazard relating to the user
• Effect of machinery breakdowns on the operating profit and standing charges
• Reserve facilities and spare parts available
• Possibilities of loss minimization
• General economic and political conditions

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