Ugandan Industries Turn to GoldStar’s MLOP Insurance to Safeguard Earnings

By Frank Kamuntu

Uganda’s industrial sector is growing fast but so are the risks that come with increased mechanisation. For many factories, processing plants, and manufacturing enterprises, a single machinery breakdown can grind operations to a halt, leading to reduced production, loss of revenue, and in severe cases, major profit erosion.

With these risks rising, more businesses are turning to specialised insurance options designed to protect their earnings whenever machinery fails. One of the most important among them is Machinery Breakdown Loss of Profit (MLOP) Insurance, a policy that cushions companies during periods of forced downtime.

Machinery Breakdown Loss of Profit Insurance works as an extension to the standard Machinery Breakdown Insurance. While the basic cover pays for repairs or replacement of damaged machinery, MLOP takes it further by covering the financial loss a business suffers due to interrupted operations.

GoldStar Insurance, one of the providers of this policy in Uganda, emphasises that MLOP is becoming a vital buffer for industries that cannot afford prolonged shutdowns.

What the Policy Covers

The cover focuses on stabilising a business’s financial health during the period when machinery is out of action. Key benefits include:

1. Loss of Gross Profit

This compensates for reduced sales or production due to machinery breakdown.
It also includes Increased Cost of Working, such as:

• Hiring temporary machinery
• Outsourcing production
• Paying extra labour to speed up the recovery process

These costs ensure that operations continue as smoothly as possible until full restoration.

2. Standing Charges

These are fixed expenses a business must continue paying even when production is halted, including:

• Salaries
• Rent
• Utilities
• Overhead costs

By covering standing charges, the policy prevents businesses from falling into deeper financial distress during downtime.

Additional Optional Add-Ons

GoldStar’s MLOP policy also allows businesses to extend their protection with specialised add-ons:

Political Violence and Terrorism

This optional cover protects firms operating in areas prone to instability or unpredictable security threats.

Additional Increase in Cost of Working (AICW)

For companies that need to resume operations urgently, this extension covers extra expenses beyond the standard cost of working.

Indemnity Period

The indemnity period — usually between 3 and 12 months — specifies how long compensation can run as the machinery is repaired or replaced. It begins on the day of the breakdown and lasts until operations return to normal, within the set limit.

As Uganda’s industries continue to expand, the financial consequences of machinery interruptions are becoming more significant. Machinery Breakdown Loss of Profit Insurance helps businesses absorb these shocks by preserving revenue, sustaining cash flow, and preventing long-term profit loss.

GoldStar Insurance encourages businesses to study the key considerations and policy exclusions to ensure they choose a package that aligns with their operational realities.

In a market where one malfunction can derail production, MLOP Insurance is emerging as a crucial safety net — keeping Uganda’s industrial engines running even when the machines fall silent.