Machinery Breakdown Insurance
- Machinery Breakdown Insurance: The main elements of this insurance are electrical and mechanical breakdown and accidental damage from extraneous causes.
The policy will provide cover under three general headings as follows:
- Damage to the machine itself
- Damage to surrounding property in the event of explosion
- Damage to other person’s properties or injury as a result of explosion
of the insured machine.
Types of Items suitable for this Insurance:
- Air Compressors
- Electrical Motors
- Refrigeration Plants
- Boilers
- Transformers and Switchgears
- Processing Machines
- Lifting plants e.g. Cranes and Forklifts.
Common causes of Machinery Breakdown:
- Faulty design, construction or erection
- Vibration, maladjustment or malalignment
iii. Carelessness of machine operators
iv Overheating due to failure of lubrication or low water conditions of boilers
- Overloading by under-estimating the weight of a load
- Defective safety device.
Please note that Machinery Breakdown insurance is only offered where maintenance standards are high but experience shows that accidents do still occur. The policy can be extended to cover loss of profit resulting from the breakdown which may lead to stoppage of work/production.
Sum Insured: The sum insured for each item should be the current new replacement value to avoid under-insurance.