Advance profits insurance

A form of business interruption insurance relating to a new business or a new activity for an existing business. It covers loss of gross profit following delay consequent upon damage insured under a contractor’s all risks or erection all risks policy.

The delay in starting the activity may be due to damage to: (a) the new works, extension or machinery; (b) suppliers’ premises; (c) machinery in transit. The indemnity period commences on the date production was intended to start and continues until it does actually start, but any increase in cost of working is calculated from the date of loss.