Machinery Loss of Profits Insurance

Breakdown and failure of critical machinery, boilers or pressure vessels in any industrial or manufacturing unit can threaten to interrupt the regular operations and jeopardize revenue streams. Machinery Loss of Profits Policy ensures an establishment against loss suffered by the accidental breakdown of any machinery. A Machinery Loss of Profits policy ensures the earnings of the business lost during the indemnity period. Hence, selection of the indemnity period is of utmost importance. The indemnity period commences on the date of damage and lasts until the business is restored to its pre-damage level or the end of the indemnity period is reached, whichever comes first.


    The policy covers your business against,

  • Loss of gross profit due to a reduction in turnover/output
  • The increased cost of working
  • Due to accidental damage to machinery/ boilers affected in stated premise consequent upon the operation of an insured peril under the Machinery policy
  • Sum insured is the Annual Net Profit plus Standing Charges based on the latest balance sheet figures adjusted to the expected trend in the forthcoming year of operations
  • The policy is subject to adjustment of premium to the extent of the difference between actual Gross Profit of the current financial year and estimated profits, subject to a downward limit of 50 percent.


  • Willful act, neglect or gross negligence of the insured or his responsible representatives.
  • Loss/damage caused by any faults/defects existing at the time of commencement of this insurance within the knowledge of the insured or his representatives.
  • A shortage, destruction, deterioration and damage to raw materials, semi-finished or finished products, or catalyst, or operating media.
  • Any restrictions on reconstruction or operation imposed by any public authority.
  • Alterations improvements or overhauls being made while repairs or replacements of damaged or destroyed property are being carried out.
  • Loss damage and/or liability caused by or arising from or in consequence directly or indirectly of war or warlike perils.
  • An extension of the normal repair period for more than 4 weeks on account of,
    1. The inability to secure or delays in securing replacement parts, machines or technical services.
    2. The inability to carry or delays in carrying out repairs.
    3. The prohibition to operate the machinery due to import and/or export customs and other restrictions, or by statutory regulations.
    4. Transport of parts to and from the insured’s premises.

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