Page 144 - Policy Wording - Hollard Business Binder (2020-08-26)

Machinery Breakdown (Including Loss of Profits and Deterioration of Stock)
MACHINERY BREAKDOWN
(INCLUDING LOSS OF PROFITS AND DETERIORATION OF STOCK)
1. GENERAL
1.1 Machinery breakdown
This Section indemnifies the Insured in respect of any unforeseen and sudden physical damage to the machinery whilst it is at work or at rest, dismantled for the purpose of cleaning, inspection and overhaul or removal to another premises including re-erection within the Insured’s premises.
1.2 Business interruption
1.2.1 This applies to loss of profit/revenue following accidental damage to machinery specified and used by the Insured at the premises.
1.2.2 The sum insured has no relation to the Fire BI sum insured and is specifically related to the equipment insured.
1.3 Deterioration of stock
1.3.1 Damage to refrigerated contents or contents contained in a cold storage facility following machinery breakdown.
1.3.2 Cover must not be provided on a stand-alone basis but in conjunction with Machinery Breakdown.
2. UNDERSTAND THE RISK
2.1 Cover does not extend to include theft or fire and allied perils. Should this cover be required, the item must also be insured under the Fire and Theft sections of the policy.
2.2 What is the primary function of the business and what type of activity is involved?
2.3 Type of equipment to be insured?
2.4 Availability:
2.4.1 Are parts readily available?
2.4.2 What are import time delays if not available locally?
2.4.3 Is standby equipment available?
2.4.4 Equivalent equipment available?
2.4.4 Are servicing agents readily available?
2.5 What other damage or financial loss can the Insured suffer if equipment breaks down?
2.6 How quickly will the contents of the cooling facility/refrigeration unit spoil if the temperature fluctuates?
2.7 Is it the property of the owner or kept on behalf of customers?
3. UNDERWRITE THE RISK
3.1 Machinery Breakdown (MB)
Value must represent replacement value including freight dues, custom duties and erection costs.
3.2 Business Interruption (BI)
3.2.1 The gross profit/revenue limit of indemnity must represent the Insured’s gross profit/revenue for the 12-month period corresponding with the period of insurance.
3.2.2 Indemnity period:
The indemnity period must represent the time it will take for the gross profit/revenue to return to normal following breakdown of the specified machinery/equipment.
Commercial Underwriting Mandates and Guidelines – Binder – Version 2 2020 143