Advanced Loss of Profit (ALOP) insurance, also known as Delay in Start-Up (DSU) insurance, protects the projected income of a business before it begins operations. This coverage applies during the construction or commissioning phase, when a delay caused by insured physical damage can result in significant financial loss.
Unlike standard Business Interruption insurance, which covers loss of existing income, ALOP insurance covers loss of anticipated revenue arising from delayed project completion. It is commonly used in large infrastructure, energy, manufacturing, and real estate projects where lenders and investors rely on timely project start-up.
This quick bite video explains:
- What Advanced Loss of Profit (ALOP) insurance is
- When ALOP coverage applies
- How it differs from traditional business interruption insurance
- Why it is critical for capital-intensive projects