CMFAS CGI Engineering & Construction Insurance question: CONSTRUCTION side of an engineering programme

CMFAS CGIEngineering & Construction Insurance

Which business interruption exposure can be insured on the CONSTRUCTION side of an engineering programme?

A Only machinery loss of profits, and only after the plant is fully operating
B Advance loss of profits / delay in start-up after an insured event delays completion
C Only the principal's ordinary trading profit earned before the project began
D None, since business interruption cover is only sold once plant is in service

Show the answer and explanation

Answer: B. Advance loss of profits / delay in start-up after an insured event delays completion

Business interruption / loss-of-profits extensions are available on both sides: the construction side offers advance loss of profits / delay in start-up, while the operational side offers machinery loss of profits.

Common mistake

Assuming loss-of-profits cover is only ever available for operating plant, not for delayed start-up.

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CMFAS CGI Engineering & Construction Insurance question: CONSTRUCTION side of an engineering programme

Answer: B. Advance loss of profits / delay in start-up after an insured event delays completion

Common mistake

Related CMFAS CGI questions

CMFAS CGI Engineering & Construction Insurance question: CONSTRUCTION side of an engineering programme

Answer: B. Advance loss of profits / delay in start-up after an insured event delays completion

Common mistake

Related CMFAS CGI questions