Machinery Loss of Profit Insurance
Protects business income when machinery breaks down
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Starting At ₹7,000/Year
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Machinery Loss of Profit Insurance
Protects business income when machinery breaks down
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1. What Is Machinery Loss of Profit Insurance?
2. Why Is Machinery Loss of Profit Insurance Important?
3. Who Should Purchase Machinery Loss of Profit Insurance?
4. Features of Machinery Loss of Profit Insurance
5. Inclusions Under Machinery Loss of Profit Insurance
6. Exclusions Under Machinery Loss of Profit Insurance
7. Machinery Loss of Profit Insurance Claim Process
Machinery Loss of Profit (MLOP) Insurance helps businesses protect their income when machinery breaks down. If a key machine stops working and your production halts, this policy pays for the profit you would have earned during the downtime. It also covers fixed costs like staff salaries, rent, and loan repayments. This helps your business stay stable while the machine is being repaired or replaced. MLOP Insurance is often taken along with a Machinery Breakdown Insurance policy.
MLOP in insurance helps businesses avoid losses that go beyond repair bills. It keeps your cash flow steady, helps you pay your workers on time, and supports your recovery until production restarts.
Here is an example of how Machinery Loss of Profit Insurance helped a textile unit in Surat:
Incident
A critical spinning machine broke down and production stopped for two months.
₹12,00,000 Lost Profit Cover
The policy paid for the income the business could not earn during the breakdown.
₹3,00,000 Fixed Costs Cover
It covered rent and staff salaries for the shutdown period.
₹1,50,000 Additional Expenses
It paid for urgent air freight of spare parts to reduce the downtime.
Because of this insurance, the unit managed its bills, kept staff employed, and restarted operations smoothly.
Machinery Loss of Profit (MLOP) Insurance is important because a machine breakdown can stop your income, but your expenses will not stop. If a key machine fails, your production halts, orders get delayed, and customers may go elsewhere. At the same time, you still need to pay salaries, rent, EMIs, and electricity bills. A MLOP Policy helps you manage this situation.
Financial Protection
Covers lost profits during downtime and maintains cash flow to meet fixed expenses like salaries, rent and loan payments
Business Continuity
Provides breathing space to repair/replace machinery without operational disruptions affecting customers
Workforce Stability
Helps retain skilled workers by ensuring salary payments continue during production pauses
Contract Security
Enables businesses to meet contractual obligations despite temporary production stoppages
Without this cover, one breakdown can lead to cancelled orders, delayed payments, staff layoffs, and financial stress. With a MLOP Policy, you stay prepared for these risks and keep your business stable.
Machinery Loss of Profit (MLOP) Insurance is suitable for any business that depends on machines for daily operations. If your factory or plant cannot run without certain equipment, then this policy is for you. It helps you manage income loss and fixed costs during machine breakdowns.
Key Industries
Textiles, packaging, printing, plastics, chemicals, engineering, and food processing businesses
SMEs with Limited Backup
Small and medium units that can't afford production delays due to lack of backup machinery
Loan-dependent Businesses
Companies with machinery loans/EMIs that need continuous cash flow for repayments
Time-sensitive Operations
Businesses working with tight delivery schedules where delays impact customer commitments
Low-margin Manufacturers
Operations with thin profit margins where even short breakdowns cause significant financial impact
If your business has taken loans, works with tight delivery timelines, or runs on thin margins, then this policy becomes even more important. It helps protect your profits, pays your staff, and keeps your business on track—even when machines fail.
Machinery Loss of Profit (MLOP) Insurance comes with features that help businesses stay financially stable during machine downtime. It works alongside your Machinery Breakdown policy and supports your income and expenses when production stops.
Covers Loss of Gross Profit
It pays for the profit you would have earned if the breakdown had not occurred.
Covers Fixed Costs
It includes rent, salaries, EMIs, and other fixed business expenses.
Waiting Period
There is a short time gap (usually 7 to 15 days) before the policy begins to pay.
Add-On Covers Available
You can include cover for overtime wages, express freight, and temporary outsourcing.
Custom Sum Insured
You can choose the amount based on your annual gross profit.
Policy Term
Usually covers one year and can be renewed every year.
Machinery Loss of Profit (MLOP) Insurance covers the financial impact your business faces when a machine breaks down and affects your operations. It supports you during the time your production is on hold and helps you recover faster without cash flow issues.
Loss of Gross Profit
The policy covers the profit you would have earned if the machine had not broken down. This includes both your net profit and fixed business expenses.
Standing Charges
Even if your plant is not running, some costs continue—like staff salaries, rent, loan interest, and electricity bills. The policy reimburses these fixed expenses.
Additional Expenditure
If you spend extra to reduce the loss—like hiring equipment, paying overtime, or outsourcing urgent orders—the insurer will cover those reasonable expenses, up to the amount of loss avoided.
Material Damage Condition
This policy works only when the machine breakdown is also covered under your Machinery Breakdown or Boiler & Pressure-Plant policy. If the breakdown is not accepted under that policy, this cover does not apply.
These inclusions make sure your business stays financially supported, even when machines fail without warning.
Machinery Loss of Profit (MLOP) Insurance helps during breakdowns, but it does not cover everything. It follows the same exclusions as your Machinery Breakdown or Boiler & Pressure-Plant Policy. If something is not covered there, it will not be covered here either.
Wilful acts or gross negligence
Any damage caused due to intentional actions or serious carelessness by the owner or senior staff is not covered.
Unlisted machinery
If the damaged machine is not listed in the policy schedule, the insurer will not pay even if its failure affects your production.
Pre-existing issues
Known faults or defects that existed when the policy started are not covered.
Spoilage of stock or materials
Loss or damage to raw materials, finished goods, fuel, refrigerants, or lubricants is not included.
Government restrictions
Delays caused by public authorities stopping or delaying repair, reconstruction, or restart are excluded.
Delays beyond four weeks
If repairs take longer due to delays in importing parts, customs issues, or technical support, that extra time is not covered.
Planned upgrades
Time spent on changes, upgrades, or major overhauls during the repair period is not covered.
War and similar risks
Losses caused by war, riots, strikes, terrorism, or nuclear risks are not covered.
Deductible and under-insurance
You must bear the policy excess (deductible) and any reduction due to under-insurance.
1. Notify Us
As soon as the loss or damage happens, contact us within 2 days. Share all relevant details and documents, such as photos or reports. We will make sure the process starts without any delays.
2. Surveyor Visit
Once notified, a surveyor will visit your site within 1-2 days to assess the damage. Please avoid moving any damaged items until the surveyor arrives. After that, we will take care of the next steps.
3. Submit Required Documents
We will guide you through submitting the necessary documents, including the claim form, incident notes, and financial records. Our team will ensure everything is submitted correctly and on time.
4. Claim Assessment & Approval
Once the documents are submitted, the surveyor will evaluate the claim and provide a settlement amount based on your policy terms. After approval, the insurer will finalize the settlement.
5. Payment Processing & Claim Closure
Once the settlement is approved, payment will be processed and issued to you or your beneficiary. After payment, the claim will be closed. If any further issues arise, we will be here to support you until they are fully resolved.
Our streamlined claim process ensures minimal disruption to your operations while providing financial support during machinery downtime.
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