Machinery Breakdown Insurance Policy
What Is the Overview Of Machinery Breakdown Insurance Policy ?
A Machinery Breakdown Policy provides coverage against unforeseen and sudden physical damages or losses to machinery due to mechanical or electrical breakdowns. It is designed to protect businesses from financial losses resulting from machinery downtime.
Key aspects of the policy:
Key Features
Covers sudden and accidental mechanical/electrical breakdowns
Applicable whether machine is in use, idle, dismantled, or cleaned
Includes repair or replacement costs of the damaged machinery
Policy can be extended to cover surrounding property damage, third-party liability, etc.
Scope
The policy covers all kinds of electrical and mechanical breakdown resulting from the following incidents:
- Faulty material/workmanship of the machine
- Action of centrifugal forces contributing to disruption of the rotating parts
- Failure of lubrication due to malfunctioning of lubricating oil pumps or its breakdown.
- Malfunctioning or failure of safety devices.
- Electrical short-circuiting including electrical fire originating from failure of insulation and or over voltage or under voltage conditions.
- Abrupt and sudden stoppage of other connected machinery.
- Entry of foreign bodies into running machine.
- Inexperienced operations causing damage due to error of judgment or error in operation.
Who Should Buy This Policy?
mention Below
Manufacturing Units
Processing Plants
Engineering Workshops
Power Generation Units
Any business heavily dependent on electrical/mechanical machinery
Add on covers
The policy can be extended to include the following risks on payment of additional premium.
- Damage to foundation of machinery
- Damage to oil in electrical apparatus
- Express freight (excluding air freight), holiday rates, overtime charges
- Air freight
- Additional custom duty i.e the additional percentage of duty payable at the time of reimport for replacement over and above the percentage of duty included in the original sum insured.
- Own surrounding property i.e. damage to the insured’s own existing property or property in his custody or control (not included in the sum insured of the policy) due to any damage to the insured machines which is covered under the policy.
- Third party liability i.e. liability falling on the insured for bodily injury to any other party other than those covered by the policy or for property damage belonging to such other party.
Documents Required
Machinery details (make, model, serial number)
Maintenance records
Invoice or purchase value
Fire Insurance details (if applicable)
Premium Calculation Factors
Value of machinery (Sum Insured)
Type and usage of machine
Age of machinery
Risk location and past claims history
Extensions required (e.g., third-party liability, surrounding property)
