Machinery Business Interruption
The insurance risk is interruption or limitation of operations due to physical damage to the insured machine (this means the machine must be covered for machine risks at the time of the damage).
Subject of Insurance
The subject of insurance is the subsequent financial loss caused by interruption or limitation of operations due to physical damage. Subsequent financial loss is understood as:
- lost profit,
- fixed costs,
- additional costs.
A claim is not considered if the interruption of operations occurred due to natural disasters. Such damages are covered by natural disaster interruption insurance.
Additional Costs are Defined as:
- rent and insurance for temporary premises,
- costs for cleaning and adjustments of temporary premises,
- rent for temporary machines and equipment,
- costs for relocating equipment to temporary premises,
- increased energy supply costs due to operations in temporary premises,
- overtime premiums necessitated by operations in temporary premises,
- increased security and gatekeeper costs due to operations in temporary premises, etc.,
- increased other costs arising in connection with renting temporary premises (e.g., telephone and other administrative fees),
- other types of additional costs may also be agreed upon in the insurance contract.
Coverage Period
The coverage period is the time span specified in the insurance contract in months from the occurrence of physical damage or from the moment financial loss begins, for which the insurer is obligated to provide insurance benefits in the event of a claim. The start of the coverage period is the moment of physical damage or the moment financial losses begin. The coverage period is determined at the sole discretion of the policyholder.
The Insurer is Not Obligated to Cover
- influences and events unrelated to the occurrence of physical damage,
- officially imposed restrictions for resuming operations,
- if the insured does not make full efforts to expedite the resumption of operations, has not ensured timely restoration, or re-acquisition of destroyed, damaged, or lost items serving the operation,
- if there is reconstruction (e.g., innovation, renovation) or re-acquisition of destroyed, damaged, or lost items serving the operation in a broader scope than they served in the operation at the time of physical damage,
- costs are not reimbursed, or are reimbursed proportionately, if they create an insurance benefit for a period exceeding the coverage period, or if they exceed the insurance sum with other benefits.
Who the Insurance is Intended For
Machine interruption insurance is primarily intended for large and medium-sized industrial enterprises.