Machinery Breakdown Insurance Protection

Machinery breakdown is a significant risk that manufacturing and mining entities face. The time and expense required to repair substantial pieces of machinery which often requires specialist attention, overseas parts or is custom made can have a significant impact on the business. If the company is uninsured then repair costs combined with the potential loss of income, temporary replacement machinery hiring costs and other costs add up to a substantial amount. This is why Machinery Breakdown insurance is important.  

What does Machinery Breakdown Insurance Cover?

The Machinery Breakdown policy caters for sudden and unforeseen physical damage to installed machinery while working, at rest, being dismantled, moved, re-erected or re-commissioned. Machinery covered ranges from small compressors or motors to boilers and larger types of machinery used in manufacturing, material handling and processing. The major areas of cover include:

• Cover against internal machinery damage such as: electrical damage, centrifugal forces, foreign bodies, failures in safety devices, overheating, impact, shock, pressure or lubrication defects.
• Damage suffered by the machinery due to errors in design, calculation, manufacture or assembly.
• External damages produced by, Fire, explosion or lightning strike, blows, collisions, falls and atmospheric phenomena.
• Damage resulting from the mismanagement or negligence of an employee due to lack of experience or expertise in handling the machinery.
• Expenses for urgent repair. Repairing complex equipment quickly can be expensive. Most policies cover any expenses needed to speed up the repair or replacement of damaged machinery, including the cost of temporary repairs.
• The policy can also be extended to cover Loss of Profits during the downtime of the machinery and related expenses of quantifying these losses.

Conditions of cover

The following are the usual conditions that are looked at when cover is being arranged:

• Replacement-value (sum insured) of selected machinery.
• Type and use of machinery.
• Service and maintenance records are critical as the policy will not respond where there is neglect of service intervals.
• Voltage protection mechanisms in place for machinery sensitive to variations in voltage.
• Regular safety and reliability tests records.
• Age of the machine including performance and output records.
• Availability of spares on site and ease of access to spares from machinery manufacturers.

Risk Management

An effective risk management program assists in identifying and mitigating the risk of machinery breakdowns. It also compliments your insurance cover. Various risk management strategies which range from visual inspection programs to more dynamic pre-emptive analysis such as using ultrasonic/X-ray inspections or thermographic testing can be used.  Such programs help to reduce the risks associated with gradually developing mechanical failures.

Talk to us today about Machinery Breakdown solutions for your business.