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MACHINERY LOSS OF PROFITS (MLOP)
MLOP insurance indemnifies the actual loss of gross profit sustained as a result of a business interruption caused by an accident covered under Machinery Breakdown insurance.
MLOP indemnifies the insured against:
- 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.
Exclusions
MLOP follows the fortunes of the corresponding Material Damage Policy hence similar exclusions in Machinery Breakdown Insurance applies to MLOP.
In addition, the following are also excluded:
- Time excess
- Loss or damage due to imposition of abnormal conditions resulting from testing, intentional overloading or experiments.
- Raw materials. Semi-finished or finished products.
- The Insured not having at his disposal in good time sufficient capital for repairing or replacing destroyed or damaged machinery.
Underwriting Considerations
- Material damage Proviso i.e. Material damage policy must be in existence.
- The amount of gross profit for the insured’s business.
- Length of Indemnity period i.e. the time it take for the business to resume normal operations after a loss incident.
- Basic rate should follow the Machinery Breakdown Insurance. Multiplies to be determined by the Indemnity period
For assistance, contact our Customer Care teams on 0711-030140 and/or 0711-030105, email customercare@directline.co.ke or visit us at our various branches.