Business Interruption Insurance (FLOP & MLOP)

Business Interruption (BI) Insurance provides financial protection against loss of income and increased costs of working when business operations are disrupted due to damage to insured property by an insured peril.

This cover operates in conjunction with Property Insurance and is generally offered as Fire Loss of Profit (FLOP) and Machinery Loss of Profit (MLOP) policies.

  • FLOP responds to business interruption following material damage due to fire and allied perils.
  • MLOP responds to loss of profit arising from breakdown of insured plant and machinery.

The policy indemnifies the insured for loss of gross profit and additional expenses incurred to maintain operations, subject to policy terms, conditions, and indemnity period.

Business Interruption Insurance - Financial protection for business continuity

KEY BENEFITS

Financial Protection

FINANCIAL PROTECTION

  • Loss of Gross Profit: Covers loss of net profit and standing charges during the interruption period.
  • Increased Cost of Working (ICOW): Covers additional expenses incurred to minimise business disruption and maintain continuity.
  • Stabilises cash flows: Protects profitability and liquidity during periods of forced shutdown or reduced operations.
Risk Coverage

RISK COVERAGE

  • Fire Loss of Profit (FLOP): Covers business interruption following insured damage to property due to fire, explosion, natural catastrophes, and other allied perils as per the Fire policy.
  • Machinery Loss of Profit (MLOP): Covers loss of profit arising from electrical or mechanical breakdown of insured machinery.
  • Indemnity Period: Covers loss sustained during the period required to restore damaged property or machinery, subject to the selected indemnity period.
Business Continuity & Resilience

BUSINESS CONTINUITY & RESILIENCE

  • Operational stability: Enables businesses to meet fixed expenses such as salaries, rentals, and interest obligations.
  • Faster recovery: Supports quicker reinstatement and resumption of normal business operations.
  • Stakeholder confidence: Enhances confidence of lenders, investors, and key partners during recovery phases.