Machinery Breakdown

Policy
Construction &
Operational Phase

Roshy Saini (19IN640)

Satish (19IN641)
Trisha Patnaik (19IN657)
 What is machinery breakdown
policy ?

Insurance policy which indemnifies the

insured against any financial loss incurred
due to loss or damage to its machinery as a
result of sudden accidental electrical and
mechanical breakdown.
 WHAT IS COVERED?
• Electrical items usually met with in a factory
• Driven items
• Process utilities
• Process equipments
Contractor’s Plant and Machinery
Insurance

CPM also called PLEQ (plant and equipment) or CPE

insurance to protect the contractor against sudden
and unforeseen damage by external physical
accidents to machinery

Subject matter: construction tools and equipment

Machines – technologically more complex, capital

intensive and works under harsh condition
Limitation under EAR/CAR policy:
 Value of construction equipment is relatively small
 Coverage Period concurrent to project period

Reason for separate CPE:

Machinery are not required on same site for entire project
duration and used at different location

Machinery Classification:
Mobile Machinery: like Earth moving machines, Tunnelling &
mining Machines, Mobile cranes, Power generator
Stationary Plant: Fixed conveyor systems, Concrete batching
plants, Tower cranes
Tools and tackles
Underwriting Considerations:
General conditions of job site & accessibility
Periodical inspections adopted by the contractors
Conditions of the construction Plants & Equipment
Experience of the Operators and/or Drivers
General standard & quality of Maintenance

Rating Factors:
Type of Machinery/Equipment & its condition
Origin of the machine whether imported or local
Working environment on the site
Quality of operator
Maintenance & upkeep system
Previous accident & claims history
Peril covered:
Fire and lightning, external explosion
Burglary, theft
Riot , strike and malicious damage
STFI
Accidental damage while at work due to faulty handling
dropping or falling, collapse toppling over and impact etc.

Exclusions:
Loss/damage to vehicles licensed for general road use
Total/partial immersion in tidal water
During transit from one project to another
Whilst working underground
Any kind of consequential loss
Business Interruption
in
Operational Phase
 Machinery Loss of Profit (MLOP)
MLOP cover is issued in conjunction with MB Cover.

In the event of any interruption to business as a

result of damage to machineries due to any peril
insured under the MB Policy, this policy enables
insured to recover:

• Loss of Gross Profit

• Increased Cost of Working
 Exclusions
• Willful act or willful neglect
• Loss or damage caused by any existing
faults/defects at the time of commencement
of this insurance
• Shortage, spoilage or damage to raw
materials, semi finished or finished products
or operating media even if the consequence of
material damage to an item indicated in the
list of machinery insured is involved.
• Extension of normal repair period for more
than 4 weeks on account of:
i. Inability/delay in securing replacement parts
ii. Inability/delay in carrying out repairs
iii. Prohibition to operate machine due to
import/export custom or any other statutory
regulations

• Any restrictions on reconstruction or

operation imposed by any public authority.
 Conditions
• No material alteration shall be made whereby the risk is
increased
• The Insured shall be obliged to keep complete records
for the three preceding years
• Discontinue the use of any damaged machinery
• Company shall not be liable in respect of any further
interruption arising out of the continued use of
damaged machinery
• The Company shall have the right to take over and
control all necessary repairs or replacements
• Compliance with statutory requirements and
manufacturer’s recommendations
Thank You.