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 Stable Innovation

Material 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 • Failure of control / regulating

 Negligence
devices
 Faulty operation
 Lack of skill • Physical explosion / implosion
 Malicious acts
• Shortage of lubricants / coolants
 Storm
 Cyclone • Overheating, impact
 Flooding / inundation
•Faulty insulation, short circuit
 Earthquakes
 Entry of Foreign Particles •Defective material / casting

• Bad workmanship

• Faults in assembly & erection

 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
General Machinery
•H.T./L.T. Switchgears
•Air compressors
•Oil/air circuit breakers
•Boilers
•Cables/electrical wiring
•Chiller plants
•Voltage stabilizer
•Pumps
•Power and distribution
transformers •Diesel engine
•Electric motors, welding •E OT crane
sets , dg sets •Arc furnaces
•Gas based combined • A/C Plant
cycle power plants
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 non-

metallic 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
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