Contractors Plant and Machinery Insurance

Presented by: H.O. Underwriting

Shriram General Insurance Company Limited

Contractors Plant & Machinery Insurance

Definition

CPM policy covers all types of Contractor's Plant and Machinery Equipments engaged for work at any specified location in India.

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What does CPM Cover

Coverage
Section 1 - Material Damage This policy shall cover any unforeseen and sudden physical damage to the property by any cause not specifically excluded. Section 2 - Third Party Liability The policy covers third party property against loss, damage destruction by any cause.

C O V E R

All Risk Insurance subject to named Exclusions Machinery at Work or at Rest, subsequent re-erection Machine being dismantled for the purpose of cleaning or overhauling

Machinery when being shifted within the premises (project site)

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Add-on Covers
Add on Covers
Earthquake Zone I Zone II Zone III & IV THIRD PARTY LIABILITY OWNER'S SURROUNDING PROPERTY

Rate
0.010% 0.005% 0 0.25%(Limit-AOP:10 Lacs, AOA:25Lacs) 0.25%

CLEARANCE AND REMOVAL OF DEBRIS 0.25% ADDITIONAL CUSTOM DUTY EXPRESS FREIGHT AIR FREIGHT 2% of the Additional Custom Duty 5% of the Air Freight

What is not Covered in CPM

Exclusions

Shriram General Insurance Company Limited

Loss or Damage caused due to Electrical & Mechanical Breakdown. {Failure, breakage or derangement, freezing of coolant or other fluid, defective lubrication or lack of oil or coolant, but if as a consequence of such breakdown or derangement an accident occurs causing external damage, such consequential damage will be indemnifiable}. Loss or damage caused due Explosion of Boiler or Pressure Vessel subject to internal steam or fluid pressure or of any internal combustion engine. Normal wear and tear of Replaceable parts (knives, drills, bits, batteries, tyres, ropes, chains, etc.). War and War like operations Loss or damaged caused by nuclear reaction, nuclear radiation or radioactive contamination. Loss or damage to machine in the course of transit from one location to another.
Other exclusions named exclusively.

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Claim Settlement First Type

Loss

Partial Loss Partial Loss

Total Loss

Full cost of replacement of parts plus repair charges. Cost of dismantling and re-erection. Depreciation is applied only for the parts with limited life. If the repair works are undertaken by the insured, actual material and labour costs plus a reasonable quantum of overheads is payable. Salvage is deducted. If the sum insured is not adequate, Condition of Average applies and claim will be paid proportionately.

Claim Settlement Second Type

Loss

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Partial Loss

Total Loss

Total Loss The new replacement value of item immediately before the occurrence of loss, less salvage and depreciation subject to adequacy of sum insured.

Note: In both cases freight and customs duty are also paid if they are included in sum insured. Policy excess is deducted from the claim.

Shriram General Insurance Company Limited Difference- Motor vs. Non- Motor
Governed by India Motor Tariff, 1989 Vehicles meant for public use and for passenger or goods carrying come under the purview of Motor Insurance All vehicles meant for Road use compulsorily registered with RTO Covered anywhere in India whether self propelled or in transit by any mode. Compulsory third Party Liability Insurance Governed by CPM Tariff Vehicles meant for limited use and for specific purpose such as excavation, harvesting, drilling etc. are covered Generally used at single location, need not be registered. Coverage restricted to project sites only. Inter site movement whether self propelled or transit by any mode is not covered. Third Party Liability will be given at the request of Insured (it is an Add-on Cover). Compensation by court for bodily injury and TP up to the Sum Insured, rest of the compensation paid by insured from his own funds. Sum Insured- New replacement cost of vehicle of the same make & model on current date. Policy not transferable unless through will (In case of Vehicle is sold, policy can be transferred to buyer at the wish of present insured). No concept of No Claim Bonus (NCB)

Compensation under TP Liability

a) b) Bodily injury- unlimited and decided by court Third Party Property Damage- up to 7.5 lacs as decided by Court. Sum Insured- Insured Declared Value (IDV)- Ex show room price less depreciation based on the age of vehicle. Policy Transferable if sold to other party No Claim Bonus provided in Motor Insurance. (NCB)

Shriram General Insurance Company Limited Difference- Motor vs. Non- Motor
Vehicle Classification Motorized Two wheeler Three Wheeler/Private Car a) b)

Vehicles which are/will work on project site comes under the CPM Tariff. Machines Classified into Five Groups a) Group I- 0.6% b) Group II- 0.8% c) Group III- 1% d) Group IV- 2% e) Group V- 0.2% All Risk Policy- Cause of losses which are not excluded under the Policy are not payable, all other losses are payable. (including Overturning) Additional Covers such as Earthquake, Owners Surrounding Property, Third Party Liability, Terrorism Floater covered by payment of additional premium.

c)
1) 2) d)

Commercial Vehicles
Goods Carrying Commercial Vehicle Passenger Carrying Commercial Vehicle Misc. Class D- Tractor Trailer, Excavator, Crane, Dumper, Road Roller, Ambulance, Dust Cart, etc.

Named Perils Policy- 10 Perils are covered under the Policy and any loss occurring due to these perils are only payable

Perils Covered- (i)fire explosion self ignition or lightning (ii) burglary housebreaking or theft (iii) riot and strike (iv) earthquake (fire and shock damage) (v) by flood typhoon hurricane storm tempest inundation cyclone hailstorm frost (vi) accidental external means (vii) malicious act (viii) terrorist activity (ix)whilst in transit by road rail inlandwaterway lift elevator or air (x) landslide or rockslide Overturning can be covered by payment of additional premium.

Overturning is a default In-Built Cover unless excluded explicitly.

Shriram General Insurance Company Limited

Motor
Tata Hitachi EX-110 Excavator purchased by Mr. X on 8-Jan-2008 for Rs. 40 lacs. On 8-Jan-2012 the Machine came for Renewal with Shriram for Motor Insurance. Sum Insured (IDV) for the Machine for Insurance will be- Present cost of new Vehicle for same make & model, less depreciation =50,00,000*50%= Rs. 25,00,000/ Mr. Xs Vehicle met with an accident on 10-Jan-2011 and was partial loss amounting to Rs. 5 lacs of Metal Parts. Claim Payable =Rs. 5,00,000*(100-35)/100= 3,25,000/

Illustration (SUM INSURED)

CPM
Tata Hitachi EX-110 Excavator Purchased by Mr.Y on 8-Jan-2008 for Rs. 40 lacs. On 8-Jan-2012 the Machine came for Renewal with Shriram for CPM Insurance Present cost of new Vehicle for same make & model- Rs. 50 lacs. Sum Insured will be Rs. 50 lacs

Condition of Average

If Mr. Ys Vehicle met with an Accident and was insured for full value of Rs. 50 lacs and partial loss of Rs. 5 lacs for Metal Parts. Claim Payable= 5,00,000/ If the Sum Insured has been taken at Rs. 25, 00, 000/- (depreciated value) then claim payable would have been= 5,00,000*25,00,000/50,00,000 = Rs. 2,50,000/-

Shriram General Insurance Company Limited

Past incident in CPM policy due to temporary installation

Some fixed part of the plant were torn out of their foundations. Concrete slabs were undermined by the land slide.

CPE and tunnel lines plates washed into the river bed

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Damage to a rail bed service machine due to broken frame structure

Due to an operational fault the operator let one of the lifted rails fall whilst the arms were moving into the rail bed. This caused the 40 meter frame structure of the machine to break and bend down to the rails.

Shriram General Insurance Company Limited Overturning of Machine-3

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NON MOTOR PROCESS

Process approval/policy

STEP 1: Request for Quote STEP 2: Quote Sent to Branches STEP 3: Collection of Premium & Proposal Form Sent to HO For Policy Issuance STEP 4: Policy Issued

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Key points to remember while filling proposal form
Name and Complete Address of Insured Give Complete Risk Location Address of machinery where it is currently working/located. If Floater cover is required, provide complete address of all the identified Risk Locations. Any Past Insurance and Claims history. Period of Insurance. Complete details of proposed machinery (Make, Model, Identification No., Chassis No., Engine No, Manufacturing Year) Bank Hypothecation In case of Finance Case Signature of Insured with date. In case policy is to be issued in the name of any Firm/Company, Rubber Stamp Impression must be taken on proposal form.

Documents required for premium collection

Premium collection details. Scan copy of cheque. Copy of Bank deposit slip. Copy of PAN Card dully signed by Insured in case if amount of premium paid for one single policy is 1 lacs or above.

CPM Insurance : Summary

Definition

Shriram General Insurance Company Limited

Coverage Contractor responsible for loss/ damage. All risk cover. Third party liability.

CPM policy covers all types of Contractor's Plant and Machinery Equipments (including those governed by the Motor Vehicles Act or rate-able under Motor Tariff) engaged for work at any specified location in India.
Exclusions Gradual wear and tear. Electrical & Mechanical Breakdown. Nuclear Peril. Failure of individual tubes. Damage by chemical explosion in recovery boiler / waste boiler. Manufacture / repairer responsibility.

Losses Repair Basis Cost of repairs necessary to restore the property to the original condition immediately before loss of Salvage. Total Loss Actual Value of the property immediately before loss less salvage (insurance and excess).

Shriram General Insurance Company Limited

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