Under the Machinery Breakdown insurance, indemnity is provided in
respect of damaged or destroyed machinery.
However, material loss is
not the only loss sustained by the Insured in the event of a loss or
damage to the insured
machinery, since in most cases, a material loss
also causes interruption or interference to the Insured’s business
operations.
This is due to the time spent in arranging the repairs,
awaiting delivery of replacement parts, starting up the plant and re-activating
the production and so forth.
The end result is a financial loss to the Insured in the form of loss
of profits and increased costs of working. In many cases,
the loss
sustained as a result of interruption to the business operations by far
exceeds the material loss suffered by the Insured.
The Machinery
Breakdown Loss of Profits is the protection against the financial
consequence of the material damage happening.
The policy insures loss of Gross Profit following an accident or
breakdown of the machinery which is indemnifiable under the Machinery
Breakdown insurance policy.
