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CONTRACTORS PLANT & MACHINERY CONTRACTORS PLANT & MACHINERY INSURANCEINSURANCE

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CPM Insurance is to provide a cover CPM Insurance is to provide a cover on annual basis to a contractor who on annual basis to a contractor who may be using his plant and machinery may be using his plant and machinery at different projects during the course at different projects during the course of the yearof the year

The cover is not limited to a specific The cover is not limited to a specific project siteproject site

It is operative at all the sites wherever It is operative at all the sites wherever the plant and machinery is in usethe plant and machinery is in use

The insurers have to be informed of The insurers have to be informed of the sites where the insured items are the sites where the insured items are being usedbeing used

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CoveragesCoverages

Location risksLocation risks: : Fire, lightning, theft, burglary and Fire, lightning, theft, burglary and house-breaking house-breaking

Impact from falling objectsImpact from falling objects: : Collision and the likeCollision and the like

Risks of human element :Risks of human element : Carelessness, Carelessness, negligence, riot, strike, malicious damage, terrorismnegligence, riot, strike, malicious damage, terrorism

Act of God risks:Act of God risks: Storm, tempest, hurricane, flood, Storm, tempest, hurricane, flood, inundation, subsidence, landslide, rockslide, earthquakeinundation, subsidence, landslide, rockslide, earthquake

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Cover operates whether the machines are at Work or at rest

Being dismantled for purpose of cleaning , overhauling and reassembled

Also applies to the shifting of equipment from point to another point at the same project.

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ExtensionsExtensions

Third Party Liability Escalations Air Freight Additional Custom Duty Owner’s Surrounding Property

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Express freight, Holiday rates and Overtime wages

Cost incurred in the clearance & removal of debris following the accident

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Lets understand the Extension better

Mazda has construction work happening at their site day and night as their completion date is very near. To finish the project on time, the employees are working for almost 19hrs and machineries are also continuously working.One of the machines during this time suddenly breaks down and the repair of the machine will take much time. Hence Mazda decides to call for another similar machine. Now who will bear the air freight charges?

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The Air freight charges will be borne by the Insurance company, if the insured has opted for it as an extension to the standard policy.

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Example for Escalations:

You have a property of 1 lac and you have Insured this property for the same amount. Now due to inflation your property rate goes higher, from 1 lac to 1.25 lac.This means that now your property is under insuredHence to avoid this underinsurance escalations are used where the premium keeps increasing forthe insured as per the current market value

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ExclusionsExclusions

Transit from one Location to another Willful negligence Boiler Explosion Wear and Tear Testing Risk War / Nuclear Risk Loss to vehicles designed and registered for

Road Use

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If there is a vehicle registered only for use on the site and its being used on the regular road, this vehicle faces damage, will the insurer pay its damage?

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No. Any vehicle that is registered for a site

and if its being used otherwise, then any damage to the vehicles will not be covered

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Sum insuredSum insured

Current New replacement value of the machinery of the same capacity and the type inclusive of all duties, levies, freight, transportation and erection costs

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Claim SettlementClaim Settlement

Two types of claim settlementTwo types of claim settlement

Partial Loss Total Loss

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Examples of some of the machineries Examples of some of the machineries that can be covered under CPMthat can be covered under CPM

Bulldozers Excavators Mobile Cranes Mobile drilling machinery Escalators and Mixing plants Fork lift trucks Conveyors

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Underwriting ConsiderationsUnderwriting Considerations

Types of machines and functions Types of machines and functions Age of the machines Age of the machines General condition of job sites General condition of job sites Periodical inspection adopted by the contractorsPeriodical inspection adopted by the contractors Conditions of the construction plant and equipment Conditions of the construction plant and equipment Experience of the operatorsExperience of the operators General standard and quality of the maintenanceGeneral standard and quality of the maintenance Any extensions of the cover requiredAny extensions of the cover required Loss experience Loss experience