Advance Loss of Profit

What happens if a project is delayed where your money is invested in anticipation of returns in future? The delay can be due to damage during construction, erection or commissioning phase of project leading to risk of loosing anticipated profit.

HDFC ERGO’s Advance Loss of Profit Insurance assures protection to you against this kind of scenario. ALOP Policy is designed for Principles and it need to be concurrent with Material Damage (MD) Project insurance.

  • Policy Cover Principle’s interest due to
    • 1. Loss of gross profit actually sustained due to the reduction in turnover and
    • 2. Increased cost of working
  • Caused by any or all the insured items suffering loss or damage under EAR/CAR material damage Policy, unless specifically excluded in this Policy, thereby causing an interference in the erection work and/or testing schedule resulting in a delay of commencement of and/or interference with the insured business
  • Earthquake, volcanic eruption, tsunami
  • The sum insured should be the anticipated Gross Profit (Net Profit + Standing Charges) for the Indemnity Period selected.
    Net Profit - Business profit before taxation
  • Standing Charges include fixed expenses incurred even in the absence of business activity like interest charges, salary & wages
  • Premium depends upon
    • Nature of project
    • Site location
    • Gross Profit
    • Indemnity Period opted
  • The policy is subject to a compulsory excess.
  • Loss or damage covered under Section I of CAR/EAR Policy by way of endorsement, unless it has been specifically agreed in writing;
  • Loss of or damage to surrounding property, construction machinery, plant and equipment;
  • Loss of or damage to operating media or feedstock, shortage, destruction, deterioration of or damage to any materials necessary for the insured business
  • Any restrictions imposed by a public authority;
  • Non-availability of funds;
  • Alterations, additions, improvements, rectification of defects or faults or elimination of any deficiencies carried out after the occurrence;
  • Any loss due to fines or damages for breach of contract, for late or non-completion of orders, or for any penalties
  • Loss of business due to causes such as suspension, lapse or cancellation of a lease, license or order, etc. which occurs after the date of actual commencement of the business
  • Any consequence of war, invasion, act of foreign enemy, hostilities
  • Nuclear reactions, Nuclear radiation or radioactive contamination;