Advance Loss Of Profit (ALOP) Insurance

There seems to be an insurance policy for just about anything. (They insured Betty Grable’s legs in the 1940s.)

Advance loss of profit (ALOP) insurance provides coverage for any financial losses due to delays in a building or infrastructure project. Companies or individuals can also get reimbursed with an ALOP policy if they lose any profit or incur higher costs when a construction project takes longer than promised to complete.

Both a customer and a construction company might take out ALOP insurance. A real estate investor could be missing out on rent from tenants. A store or restaurant owner might be unable to open for business and make revenue if the site is not ready. The construction company might need the insurance proceeds to pay to rent equipment or hire employees for a longer period of time than expected. The coverage is for the amount of gross profit lost due to delays, and all terms should be carefully spelled out in the policy.