In the event of a machinery or plant breakdown, the resultant monetary loss due to the halting of the production process could be enormous; thus, this insurance policy was specifically designed to indemnify the insured against the below eventualities:

• Loss of net profit (LOP)
• Insured standing charges i.e. continuing business expenses including salaries and wages paid to employees.
• The increase of the cost of working means reasonable expenses would need to be incurred in order to avoid diminishing or reducing in turnover

*This policy is also known as Consequential Loss Policy.