What is Contractors’ Plant and Machinery Insurance?
The policy is designed to cover contractors’ plants and machinery working at construction sites like dumpers, excavators, rollers, drilling machines, etc. Given that a major part of a contractor’s investment goes into the above-mentioned machinery, the policy protects the business from any probable damage to plant and machinery used by the contractors to complete a task.
What does Contractors’ Plant and Machinery Insurance Cover?
A Contractor’s Plant and Machinery Insurance offers the coverage mentioned below:
Loss/damage to the contractors’ construction equipment
The policy covers the expense incurred due to loss or damage of equipment used at the construction site because of accidents arising from perils like fire, riots, strikes, malicious damage, earthquake, flood, storm etc.
Damage caused at work, rest or during Care
If the insured property gets damaged at work or rest or due to maintenance, the policy will cover it.
What’s not Covered?
eSanad’s Contractor’s Plant and Machinery insurance policy does not cover losses due to the following:
Negligence
If the machinery gets damaged because of the insured’s negligence or their representative, the policy will not cover the expenses.
Terrorism
If the equipment incurs any damage due to an act of terrorism, it won’t be covered.
War and nuclear perils
Damage caused to pieces of equipment due to factors like war and atomic hazards will not be covered under the insurance policy.
Lack of use and for undergoing test
Damage or deterioration of machinery due to lack of use and undergoing tests is not covered under the policy.
Pre–existing damages
Fault and damage to pieces of equipment’s which were pre-existing before the purchase of the policy will not be covered.
Mechanical or electrical breakdown
Failure of machinery due to electrical or mechanical breakdown is not covered under Contractor’s Plant and Machinery insurance policy.
An explosion of pressure vessel/boiler
Any damage incurred by the equipment due to the explosion of a pressure vessel is not covered under the policy.
Features of Contractor’s Plant and Machinery Insurance policy
Specific features of Contractor’s Plant and machinery policy are below:
- eSanad’s Contractor’s Plant and Machinery insurance cover only selected machinery.
- Damage caused to machinery used at construction sites is covered under the policy.
Why is it required?
The Contractors’ Plant and Machinery Insurance is required because of the reasons listed below:
- Save yourself from a massive loss of investment – With heavy machinery prone to damage, it can result in a severe loss of investment for the owner. In such cases, the policy can be beneficial.
- Replacement value – The policy offers insurance as per the current replacement value of the machinery.
- Coverage for both partial and total damage – The policy offers complete coverage for the partial and total damage to the equipment.
How is the premium calculated for Contractors’ Plant and Machinery Insurance?
The payable premium for the policy depends on several factors. They are as below:
Sum Insured
The amount insured in the policy impacts the premium that is payable by the insured. The higher the sum insured, the higher the premium and vice versa.
Type of machinery
The premium also depends on the type of machinery involved. Since equipment’s used at a construction site is usually expensive, the sum insured is generally high. By paying a higher premium the policyholder saves a lot of money if there is any loss or damage to machinery
Risks
The associated risks at the project site also impact the policy’s premium. If the stacks are high, the chance of accidents is higher, resulting in huge losses that the insurer must bear.
Location
The location of the worksite or where the equipment is kept impacts the payable premium.
Use of equipment
If the machinery is used for some purpose that involves a high risk of damage, then the machinery is prone to it. So, the use of the equipment impacts the premium of the policy.
Who should buy the policy?
The policy of Contractors’ Plant and Machinery insurance can be availed by those mentioned below:
Equipment Owners
The policy can be brought by the owners of the machinery. It helps them cover the expenses when the equipment is damaged or stolen.
Investors in the project
Banks and financial institutions which have invested in the project where the machinery has been used can also buy the policy.
Users of the machinery
Contractors tasked with finishing the project and the people using the machinery at the project site can also buy the insurance policy.
How to choose the right Contractors’ Plant and Machinery Insurance policy?
When choosing the right Contractors’ Plant and Machinery insurance, you need to consider the following:
Proper coverage – When choosing the right insurance policy, you need to check the coverage you are getting. You need to consider getting adequate coverage before deciding which insurance policy is good for yourself.
Extra benefits – An insurance policy with different benefits needs to be considered. As most insurers will provide the standard coverage, look for additional benefits like 24×7 assistance when deciding which insurance policy is best for you.
Hassle-free claims process – Like in any other insurance policy, opting for a one for an insurer which has a hassle-free claims department needs to be considered. It will enable the claim to be settled quickly.
FAQs about Contractors’ Plant and Machinery Insurance
What is the duration of a Contractors’ Plant and Machinery insurance policy?
The duration of the insurance policy is one year, and you need to renew it yearly to continue with its benefits.
For cancelling the policy, is there any cancellation charge?
In case the request for midterm cancellation is made by you, we will retain premium on short period scale for the period policy was in force. Balance amount shall be refunded to You.
Is CPM insurance an all-risk insurance policy?
Yes, this policy is an all-risk insurance subject specific exclusions as highlighted therein.
Can add-on covers be brought to add more coverage to the selected insurance plan?
Yes, add-on covers can be added to the selected insurance plan to expand the coverage.
Is contractual liability included under the insurance policy?
No, contractual liability is not included under the insurance policy.
Last modified: January 15, 2024
