MACHINERY BREAKDOWN INSURANCE

Fire

Lightening

Explosion

ARE THESE ONLY THE PERILS YOUR MACHINERY IS PRONE TO ???

Aircraft Damage

Riot Strike

Flood Storm

IF YES ….HOW ABOUT THESE LOSSES

MACHINERY BREAKDOWN INSURANCE

MACHINERY BREAKDOWN POLICY Unison Insurance Broking Services Pvt Ltd

Machinery Breakdown

Loss potential by Life AT INITIAL STAGES & AT TERMINAL STAGES POSSIBILITY OF BREAKDOWN IS MORE FAILURE RATE

Initial

Mature

Terminal

Design Material

Stable

Innovation Rehabilitation

TIME

MACHINERY BREAKDOWN INSURANCE 

Technically

a breakdown is a malfunction, but is

insurable only when it is sudden, accidental and involves

physical

damage

to

the

machine

/

equipment in whole or part 

Manufacturers provide warranty only and

no

overall protection is possible 

Majority of losses caused by human influence or due to operation

CAUSES OF MACHINERY BREAKDOWN TO DESCRIBE FEW MAJOR CAUSES          

Carelessness Negligence Faulty operation Lack of skill Malicious acts Storm Cyclone Flooding / inundation Earthquakes Entry of Foreign Particles

•

Failure

of

control

/

regulating devices •

Physical

explosion

/

implosion •

Shortage of lubricants /

coolants •

Overheating, impact

•Faulty

insulation,

short

circuit •Defective material / casting

MACHINERY BREAKDOWN COVER Physical damages to machinery which are sudden & accidental Cover is given irrespective of the fact that machinery 

Are in use / not in use, dismantled for cleaning



Maintenance / overhauling is being carried



Moved on the premises



Premium Rate charged per equipment basis



Parts of machines only can be covered for insurance



Electronic equipments such as computers, medical and biomedical equipments are not considered for machinery breakdown insurance.

MACHINERY BREAKDOWN COVER



Different premium rates for different machinery



Gear boxes are not insured in isolation



Standby machinery can also be covered (50% discount of rate)



In case ‘foundation’ & Lubrication oils needs to be covered, their values should be declared separately & Specifically.

MACHINERY BREAKDOWN COVER

Electrical machinery •H.T./L.T. Switchgears •Oil/air breakers

circuit

General Machinery •Air compressors •Boilers

•Cables/electrical wiring

•Chiller plants

•Voltage stabilizer

•Diesel engine

•Power distribution transformers

•E OT crane

•Electric welding sets

•Pumps and

motors, sets , dg

•Arc furnaces • A/C Plant

MACHINERY BREAKDOWN – Exclusions 

Damage due to fire related perils



War & nuclear events



Damage due to overload experiments



Gradually developing flaws, cracks



Wear & tear



Willful act, gross negligence



Pre - existing defects known to insured

MACHINERY BREAKDOWN – Special Exclusions 

Excess or deductible



Belts, ropes, chains, rubber tyres, dies, moulds, objects made of glass, porcelain, all operating media (e.G. Lubricating oil, fuel), endless conveyor belts, packing material, non metallic parts and nonmetallic lining or coating of metal parts



Parts under manufacturers guarantee

INFORMATION REQUIRED FOR MBD Full nameplate details of the machine 

HP / KW / PSI / KVA / RPM



Manufacturer’s name,



Type, year of manufacture,



Serial number

And such other identification details are required to be submitted to the insurer, Risk inspection is carried out by insurers to ascertain: 

Physical condition of equipment



Loss history



Maintenance practices, spares availability etc.



Unconventional features



Plant configuration,overhauling details etc

BASIS OF SUM INSURED 

SUM INSURED SHOULD BE THE REPLACEMENT VALUE OF THE EQUIPMENTS INCLUDING THE COST OF DUTIES PAID, FREIGHT CHARGES AND ERECTION COST.

DEDUCTIBLES

Other Deductibles / Warranties Apart from the standard Excess, Depreciation / Deduction applicable on the Equipments based on the Endorsements provided in Tariff

MACHINERY BREAKDOWN – Extensions  

Insured’s own surrounding property (25% of Avg MB rate) THIRD PARTY LIABILITY (-do-)



Express freight, overtime, holiday wages etc. (Avg MB rate)



Air freight (5%)



Additional Custom Duty (2%)

Machinery breakdown cover is quite popular in following industries 

Power generation /distribution



Chemicals / pharmaceuticals



Steel / Paper / Cement / Printing

INDEMNITY CONDITION 

PARTIAL LOSS : WHERE INSURERS WILL SETTLE THE CLAIM WITHOUT CONSIDERING THE DEPRECIATION.



TOTAL LOSS : WHERE IN INSURERS WILL SETTLE THE CLAIMS AFTER DEDUCTING THE DEPRECIATION.

Claims Requirements 

In event of claim the following requirements are basic for claim processing  Claim Intimation  Claim Form  Copies of log books  Estimate of damage  Cause of damage to the machinery  Service Engineer’s report stating the cause of loss  Parts testing report by manufacturer stating the cause not attributable to manufacturing defect  New purchase cost with installation of a new machinery/part of the same configuration  Repair Bills  Payment Receipts

********************** THANK YOU **********************