Engineering Insurance

Overview

Engineering insurance provides coverage for risks associated with construction projects, machinery, and equipment. It typically includes protection against property damage, machinery breakdown, and liability arising from engineering-related activities. This type of insurance is essential for construction companies, manufacturers, and businesses involved in engineering projects, as it helps mitigate financial losses caused by accidents, equipment failures, or unforeseen events.


Insurance Offerings

  • Contractors All Risk Insurance/Third Party Liability Insurance
  • Contractors Plant and Machinery Insurance
  • Erection All Risk Insurance/ Third Party Liability Insurance
  • Machinery Break Down Insurance
  • Loss of Profit Due to Machinery Break Down
  • Deterioration of Stock
  • Computer and Electronic Equipment Insurance

Contractors All Risk Insurance/third Party Liability Insurance

The Contractor All Risks policy is specifically tailored to provide comprehensive coverage for civil engineering construction projects, ranging from small-scale villas to the construction of bridges or high-rise buildings. As an “All Risk” policy, it offers protection against a wide range of risks encountered during construction activities, with exceptions outlined in the policy documentation.

This policy encompasses all aspects of the construction process, including preparatory, provisional, and final works, as well as the materials and equipment involved. Additionally, it can be jointly issued in the names of both the contractor and the employer, ensuring alignment with contractual insurance requirements. Furthermore, the policy can be extended to include coverage for constructional plant, enhancing the scope of protection provided under the Contractor All Risks policy.

Material Damage: This coverage extends to almost any sudden and unforeseen physical loss or damage incurred by the contract works, property, or insured items during the policy period. Exceptions to coverage are specified in the policy documentation.

Third Party Liability: Under this section, coverage is provided for third-party liability, wherein the insured becomes legally liable to pay damages. This liability encompasses accidental bodily injury or illness suffered by third parties, as well as accidental loss or damage to property owned by third parties. The duration of coverage aligns with the contract period stipulated in the Letter of Award.

On request, with additional premium, the policy can be extended to cover various optional extensions namely:

  • Construction Plant and Equipment
  • Construction Machinery
  • Removal of Debris Costs
  • Surrounding Property
  • Transit to or from the site (excluding sea or air transit)
  • Maintenance cover
  • Professional Fees for Architects,Engineers, Surveyors etc. for the reinstatement of damage

Certain significant exclusions include losses arising directly or indirectly from:

  • War, Civil War, Political Risk
  • Terrorism and Sabotage
  • Nuclear reaction, nuclear radiation or radioactive contamination.
  • Willful act or willful negligence of the insured or his representatives.
  • Cessation of work whether total or partial.
  • Losses within the compulsory access.
  • Loss due to faulty design
  • Wear and tear
  • Loss or damage discovered at the time of taking an inventory.
  • The cost of replacement, repair or rectification of defective material and/or workmanship
  • Mechanical and/or electrical breakdown or derangement of construction plant and machinery
  • Consequential loss of any kind
  • Seepage, Pollution and Contamination

You must ensure that the sum insured stated in the Schedule is not less than:

  • The full value of the contract works upon completion of the contract, inclusive of transport charges, customs duties, etc.
  • The replacement value of construction, plant, and machinery, if applicable. If the sum insured stated in the schedule is less than the required insured amount at the time of loss (i.e., under-insurance), you are considered self-insuring the difference. The average condition will apply in the event of a claim.

Contribution Condition: If, at the time of any claim under the policy, there is any other insurance covering the same loss, damage, or liability, the insurer shall not be liable to pay or contribute more than its ratable proportion of any claim for such loss, damage, or liability.

  • Period Start: The cover commences upon the unloading of the first consignment at the site or the commencement of work and remains in force as stated in the policy.
  • Period End: The policy terminates upon the project being handed over to the principal or put into service. Any extension of the contract period can be considered, provided advance notification is given to the insurer through a written declaration and submission of additional documents.

  • Period Start: The cover commences upon the unloading of the first consignment at the site or the commencement of work and remains in force as stated in the policy.
  • Period End: The policy terminates upon the project being handed over to the principal or put into service. Any extension of the contract period can be considered, provided advance notification is given to the insurer through a written declaration and submission of additional documents.

Contractors Plant And Machinery Insurance

CPM Insurance offers annual coverage to contractors who utilize their plant and machinery across various projects throughout the year. This policy provides comprehensive coverage for the contractor’s plant and machinery used at different project sites, without limitations to specific locations. Coverage extends to all sites where the insured items are in use, requiring the insured to inform the insurer of the sites where their equipment is deployed.

The policy coverage encompasses any unforeseen and sudden physical loss or damage to the insured items due to various causes, including:

  • Burglary, theft, riot, strike, and malicious damage.
  • Fire and lightning, external explosion, earthquake, flood, subsidence, inundation, landslide, and rockslide.
  • Storm, tempest, hurricane, typhoon, and tornado.
  • Accidental damage while at work due to faulty handling, dropping, falling, collapse, collision, and impact.

The insured is indemnified for any loss or damage to the insured item while it is being used or installed at the site against unforeseen and sudden physical damage by any cause, provided that it is not specifically excluded under the policy.

Certain significant exclusions include losses arising directly or indirectly from:

  • Electrical, Electronic or Mechanical Breakdown failure or breakage without the operation of any external peril.
  • Loss or damage to replaceable parts which have limited life such as bits, knives, ropes, belts, chains etc. etc.
  • Loss or damage due to explosion of any boiler or pressure vessel.
  • Loss or damage to any water borne vessel and crafts, sinking or damage by sea waters or tides.
  • Loss or damage sustained during the transit from one location to another.
  • Damage while working underground
  • War and war-like situations including nuclear risks.
  • Willful Negligence
  • Direct consequence of the continual influence of operation e.g. wear and tear, corrosion, rust, collisions and depreciation. Vehicles designed and licensed for general road use
  • Total or partial immersion in tidal water
  • Damage occurred whilst any Insured item is undergoing a test of any kind
  • Consequential loss or liability of any kind

On request, with additional premium, the policy can be extended to cover various optional extensions namely:

  • Third Party Liability
  • Escalations
  • Air Freight
  • Additional Custom Duty
  • Owners Surrounding Property
  • Express Freight
  • Holiday Rates
  • Overtime wages
  • Cost incurred in the clearance and removal of debris

The policy is typically issued on an annual basis, providing coverage for a period of one year from the effective date of the policy.

The sum insured should equal to the cost of replacement of the same kind and capacity via cost of replacement including freight, dues and custom duties plus cost of erection.

  • Covers loss or damage to plants and machinery, ensuring protection for valuable assets.
  • Provides comprehensive protection against a wide range of risks, excluding only specific exclusions.
  • Offers flexibility by covering insured items whether they are in operation, at rest, undergoing maintenance, or in the process of re-erection.

Erection All Risk Insurance/ Third Party Liability Insurance

The Erection All Risk policy is specifically tailored to safeguard projects involving the erection or installation of plant, machinery, and equipment, whether it’s the installation of a single machine or the construction of a large power plant.

This comprehensive “All Risk” policy covers a wide range of activities, including erection, installation, testing, and commissioning of plant and equipment, with exceptions outlined in the policy. It provides protection to contractors or employers against physical loss or damage to contract works, construction plant, machinery, and equipment, including cover for third-party property damage and bodily injury. Additionally, the policy can be issued jointly in the names of both the contractor and employer, ensuring compliance with contractual insurance requirements.

Material Damage (MD): This section offers coverage against sudden and unforeseen physical loss or damage related to all risks associated with the erection and installation of machinery, plant, and steel structures of any kind, throughout the policy period.

Third Party Liability: Under this section, coverage is provided for third-party liability, wherein the insured becomes legally liable to pay damages. This liability arises from actions or events related to the insured activities, as outlined in the policy terms and conditions.

Certain significant exclusions include losses arising directly or indirectly from:

  • War, Civil War and any act of terrorism
  • Radioactive and nuclear energy risks
  • Willful acts or willful negligence
  • Wear and tear
  • Faulty design , defective material or casting and/or bad workmanship
  • Mechanical and/or electrical breakdown or derangement of construction plant and machinery
  • Consequential loss of any kind, including penalties, losses due to delay, lack of performance, loss of contract
  • Seepage, Pollution and Contamination
  • Asbestos

On request, with additional premium, the policy can be extended to cover various optional extensions namely:

  • Civil Engineering Works
  • Equipment for Erection
  • Removal of Debris
  • Professional Fees
  • Surrounding Property
  • Transit to or from the site (excluding sea or air transit)
  • Testing and commissioning
  • Maintenance cover
  • Professional fees for architects, surveyors etc. for the reinstatement of damage, etc

  • Period Start: Coverage begins upon the unloading of the first consignment at the site or commencement of work and remains in force as stipulated in the policy, including the test run period.
  • Period End: The policy concludes upon the project’s handover to the principal or when it is put into service. Extensions of the contract period may be considered, provided advance notification is given to the insurer through a written declaration and submission of additional documents.

You must ensure that the sum insured stated in the Schedule is not less than:

  • The full value of the erection works at the completion of the contract. This includes the completely erected value of the plant and machinery, inclusive of freight, customs duties, and the cost of erection.
  • The replacement value of construction, plant, and machinery, if applicable.

  • The cover can be customized to meet the specific needs of the project.
  • Optional extensions are available and can be tailored to suit the individual customer’s requirements.

Machinery Break Down Insurance

This policy provides coverage for financial losses incurred by the insured due to loss or damage to machinery resulting from sudden accidental electrical and mechanical breakdown. It covers the cost of repairs or replacement of machinery of similar nature.

  • This insurance is available to individual owners of the machine or to individuals, companies, or entities with a financial interest in the machine.
  • All types of industrial machinery, such as compressors, pumps, turbines, as well as electrical machines like transformers, electrical motors, and generators, can be covered under this policy.

This policy provides a solution by covering the loss of profit resulting from a reduction in turnover due to business interruption following machinery breakdown. It can only be taken in conjunction with a machinery breakdown policy.

The “deterioration of stock in cold storage” insurance is tailored to meet the needs of those seeking coverage against the deterioration of goods in cold storage caused by a breakdown of refrigerating machinery. This policy is available only in conjunction with a machinery policy.

The policy provides coverage for sudden and unforeseen physical damage, including breakdown, to electronic equipment covered under the policy, due to any reason not specifically excluded.

Equipment that can be covered under this policy includes:

  • Electronic data processing machines.
  • Telecommunication equipment.
  • Transmitting and receiving installations (including Radio, TV, Cinema Sound Reproduction, and Studio Equipment).
  • Electro-Medical Installations.
  • Signal and Transmitting units.

Note: This list is not exhaustive. For detailed terms and conditions regarding coverage under this policy, please refer to the policy contract.

For more details or to buy ENGINEERING  INSURANCE