Machinery Loss of Profit
Loss of gross profit while production is down following a machinery breakdown that is itself covered.
Also calledMLOP · Machinery Breakdown Loss of Profit
First thing, todayLog the stopped hours, the shifts lost and any hired-in substitution from the hour the machine stopped.
- Tell the insurer now, not after the assessment.
- Start the figures on day one the period of indemnity runs from the loss, not from when somebody got to it.
- Every document within the time the insurer asks for it.
When you would claim
- Production line down after a covered breakdown
- Output reduced while a machine runs at part capacity
- Cost of hiring in or outsourcing to keep supplying customers
What insurers most often rely on
- The underlying breakdown claim not admitted
- Time excess in the wording longer than the actual downtime
- Downtime attributable to waiting for parts rather than to the breakdown, where the wording draws that line
- Output loss claimed without production records to support it
Every one of those is answerable, and several are decided by what was done in the first two days rather than by anything argued later.
The documents
most of it exists already9 items, and most of them exist somewhere in your own office already. Assemble them once and properly; a file sent in pieces takes three times as long to settle.
- Claim form and the machinery breakdown claim it follows
- Production records for the period before and after
- Shift logs showing hours lost
- Order book and despatch records
- Invoices for hired plant or outsourced production
- Accounts establishing the rate of gross profit
- Cancelled cheque and bank details in the insured's name, for the NEFT payment
- Details of any other insurance covering the same risk
- The loss-of-profit working, tied to the days the machine was out rather than to the days the repair took
Next
Fire Claim: The First 72 Hours, and what it shares with this
An interruption claim rides on the damage claim underneath it, so start with the playbook for what was damaged. Then put a date on the day production stopped and a date on the day it resumed, because the gap between them is the claim.
Check the indemnity period
Two things cap this and neither is the building. The gross profit you declared, which is averaged the same way a sum insured is, and the indemnity period, which is routinely set at twelve months because twelve months is the default.
Filed under: Property and engineering · Lost income and interruption
Claims that sit next to this one
the same premises, or the same eventMachinery Breakdown
the damage this cover waits on
Business Interruption
the same idea, driven by fire
Deterioration of Stock
what spoils while the plant is stopped
Production stopped and the losses still running? Report a loss or call 92514 56334.