When a small but vital part of the machine fails, the entire work could come to a stand still. The repairs to machinery following breakdown has become not only costly but time consuming as well. Sometimes the time lag between the breakdown and completion of repairs is too long and though the insured may get indemnified full in respect of cost of repairs to his machinery under a Machinery Breakdown policy, he will still be left unprotected as to the losses consequent upon the breakdown of his machinery.

Many a time the consequential loss is more than the cost of repairs to his machinery. This policy covers the consequential losses that may be suffered by individuals using the machinery following breakdown.

The admission of claim under Machinery Breakdown or Boiler Policy is a prior requisite for admission of claim under Machinery Loss of Profits Policy. Unlike in Fire Loss of Profits Insurance the insured under a Machinery Loss of Profits Policy has the option to insure only part of his machinery and the indemnity period may also be comparatively less, from 3 months to 12 months. The cover under the machinery Loss of Profits Policy is in respect of the actual financial losses suffered by the insured due to the business interruption arising from 

increase in cost of working