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

Manufacturers 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

Insureds 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 Engineers 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
**********************