Machinery Breakdown Insurance
Heavy machinery is built for strength and durability; they are, however, still prone to damage from environmental causes.
This policy covers any damage to a plant or equipment while working, at rest, or being dismantled for cleaning, repairing, or overhauling. Some causes can be short circuits, structural defects, loosening parts, excessive speed and lack of lubrication.
Situations when machinery breakdown insurance can be used
- Machinery breakdown due to short-circuits, excess voltage, faulty electrical design, faulty material, and faulty casting that manifest after the warranty period due to electrical and mechanical breakdowns
- Abnormal operating conditions of the machine
- Falling, impact and collision resulting in breakdowns
- Carelessness and lack of operating skills in the operations and management of machinery
- Turbines bursting, compressors, hydraulic cylinders or other apparatus which is subjected to centrifugal force or internal pressure
- Damage or loss due to the initiation of fire from within the machinery is also included, which is generally excluded from the standard fire protection policy
- The protection is offered for machines both in working and in rest condition. Some other states are when dismantled or moved or re-assembled for cleaning, inspection or repair.
There are two scenarios representing the replacement cost of the machinery:
In case of partial loss to the machinery, the coverage will include the total cost of parts, including labour charges, air-freight charges, custom duty and the charges for dismantling and re-erection of the machinery.
The sum insured in this scenario covers the actual value of items immediately before the occurrence minus the applicable depreciation value.
Certain extra coverage can be enjoyed on the payment of additional premiums. These cases include express freight, air freight, customs duty and third-party liability.
