Machinery Breakdown Insurance
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What is Machinery Breakdown Insurance?
The policy covers the cost of repairs & replacement of damaged machinery due to mechanical and electrical breakdowns.
Machinery insurance also covers the loss of income due to business interruptions. It ensures the smooth functioning of factories in unforeseen circumstances.
Who Needs Machinery Breakdown Insurance?
Every business that operates with any kind of machinery or equipment needs breakdown insurance. It is important for the following businesses to get this protection.
Companies with large and sophisticated machinery or equipment. E.g., aerospace, energy, transportation
Construction, manufacturing, and mining businesses that need high-risk machinery for operations
High-precision manufacturing companies that make specialized products. E.g., medical & defense equipment
Businesses that are vulnerable to mechanical and electrical breakdowns
Companies located in areas with irregular power supply and power disruptions
Risk Scenarios in Machinery Breakdown Insurance
Defects in casting and material
Short circuits and other electrical problems
Faulty design and poor workmanship
Damage due to high-pressure systems
Bursting or tearing apart due to centrifugal force
Damage from the impact of motor vehicles
What are the Add-on Covers Available in Machinery Breakdown Insurance?
Third-party liability cover
This covers the legal claims arising due to bodily injury or death of any third party or damage caused to third-party properties.
This insurance protects you against losses caused to the shipment during its transit from one place to another.
Holidays & overtime charges cover
This covers the additional cost of labor working overtime, during nighttime, or during public holidays to remedy the breakdown.
Damage to the machinery’s foundation
Any damage caused to the foundation of machinery can be covered by purchasing this add-on cover.
What is Covered Under Machinery Breakdown Insurance?
Machinery insurance covers the loss due to electrical and mechanical breakdowns of machinery & equipment. The general inclusions are:
What is not covered under Machinery Breakdown Insurance?
A machinery insurance policy does not cover the following:
Advantages of Machinery Breakdown Insurance
These plans cover the repair & replacement costs of machinery due to electrical & mechanical breakdown.
Covers the investment in advanced & expensive equipment.
Prevents disruption of business operations due to machinery breakdown.
Covers financial losses due to any production/sales loss or additional expenses on repairs.
Covers expenses incurred on freight, duties, and labor charges.
Some policies also provide coverage for third-party liability claims under an add-on cover.
Frequently Asked Questions About Machinery Breakdown Insurance
Yes. The machinery insurance policy will cover the loss in all conditions. It is not necessary that the machinery should be in operating condition. The policy covers the loss even if it is idle or dismantled.
The premium of a machinery breakdown policy depends on these factors:
(i) Type & value of machinery
(ii) Amount of insurance coverage & add-on covers chosen
(iii) Age & condition of the machinery
(iv) Specific business risks
(v) Location where the machinery is used
First, you need to assess the specific risks & requirements of your business. Then compare the different machinery breakdown policies available in the market. For any support, you can contact PIB Secure. We have a team of insurance experts to help you choose the best policy for your needs.
Disclaimer: It is important to carefully review policy documents to understand the terms and conditions that apply to the policy & make sure that it meets your specific needs and requirements.