Advanced loss of Profits Insurance

In the event of the construction, erection or conversion of a production plant being delayed or interrupted by an accident, due to which the date of commissioning or utilisation of such plant is postponed, there may be pecuniary loss to the Financier who has funded the plant/ project. The ALOP Policy is intended to cover such financial stakes. The financial consequences of the stoppage or the interruption of any manufacturing operation or on the other hand, any delay of a plant under construction-may be summarised as under:-

  • Suspension of works at a project site may lead to drop in cash received while outgoing payment will continue at least partially.
  • The delayed opening of a new plant directly affects its earning power.
  • Growth and profitability will also be affected.

The financiers insist for an ALOP policy to be taken by the Principal/Owner of the plant in order to ensure that there is no loss of interest due to delay in repayment caused by delay in commencement of the Project arising out of the operational of perils covered under MCE policy. The policy is arranged to commence as soon as the MCE policy starts.