Machinery Breakdown Insurance

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Machinery Breakdown Insurance

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Machinery Breakdown Insurance

  1. 1. <ul><li>ARE THESE ONLY THE PERILS YOUR MACHINERY IS PRONE TO ??? </li></ul>Fire Lightening Explosion Aircraft Damage Riot Strike Flood Storm
  2. 2. IF YES ….HOW ABOUT THESE LOSSES
  3. 3. MACHINERY BREAKDOWN POLICY MACHINERY BREAKDOWN INSURANCE Unison Insurance Broking Services Pvt Ltd
  4. 4. Machinery Breakdown Loss potential by Life FAILURE RATE TIME AT INITIAL STAGES & AT TERMINAL STAGES POSSIBILITY OF BREAKDOWN IS MORE Initial Mature Terminal Design Material Stable Innovation Rehabilitation
  5. 5. MACHINERY BREAKDOWN INSURANCE <ul><li>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 </li></ul><ul><li>Manufacturers provide warranty only and no overall protection is possible </li></ul><ul><li>Majority of losses caused by human influence or due to operation </li></ul>
  6. 6. CAUSES OF MACHINERY BREAKDOWN <ul><li>Carelessness </li></ul><ul><li>Negligence </li></ul><ul><li>Faulty operation </li></ul><ul><li>Lack of skill </li></ul><ul><li>Malicious acts </li></ul><ul><li>Storm </li></ul><ul><li>Cyclone </li></ul><ul><li>Flooding / inundation </li></ul><ul><li>Earthquakes </li></ul><ul><li>Entry of Foreign Particles </li></ul><ul><li>Failure of control / regulating devices </li></ul><ul><li>Physical explosion / implosion </li></ul><ul><li>Shortage of lubricants / coolants </li></ul><ul><li>Overheating, impact </li></ul><ul><li>Faulty insulation, short circuit </li></ul><ul><li>Defective material / casting </li></ul><ul><li>Bad workmanship </li></ul><ul><li>Faults in assembly & erection </li></ul>TO DESCRIBE FEW MAJOR CAUSES
  7. 7. MACHINERY BREAKDOWN COVER <ul><li>Physical damages to machinery which are sudden & accidental </li></ul><ul><li>Cover is given irrespective of the fact that machinery </li></ul><ul><ul><ul><li>Are in use / not in use, dismantled for cleaning </li></ul></ul></ul><ul><ul><ul><li>Maintenance / overhauling is being carried </li></ul></ul></ul><ul><ul><ul><li>Moved on the premises </li></ul></ul></ul><ul><li>Premium Rate charged per equipment basis </li></ul><ul><li>Parts of machines only can be covered for insurance </li></ul><ul><li>Electronic equipments such as computers, medical and biomedical equipments are not considered for machinery breakdown insurance. </li></ul>
  8. 8. MACHINERY BREAKDOWN COVER <ul><li>Different premium rates for different machinery </li></ul><ul><li>Gear boxes are not insured in isolation </li></ul><ul><li>Standby machinery can also be covered (50% discount of rate) </li></ul><ul><li>In case ‘foundation’ & Lubrication oils needs to be covered, their values should be declared separately & Specifically. </li></ul>
  9. 9. MACHINERY BREAKDOWN COVER <ul><li>Electrical machinery </li></ul><ul><ul><ul><li>H.T./L.T. Switchgears </li></ul></ul></ul><ul><ul><ul><li>Oil/air circuit breakers </li></ul></ul></ul><ul><ul><ul><li>Cables/electrical wiring </li></ul></ul></ul><ul><ul><ul><li>Voltage stabilizer </li></ul></ul></ul><ul><ul><ul><li>Power and distribution transformers </li></ul></ul></ul><ul><ul><ul><li>Electric motors, welding sets , dg sets </li></ul></ul></ul><ul><ul><ul><li>Gas based combined cycle power plants </li></ul></ul></ul><ul><li>General Machinery </li></ul><ul><ul><ul><li>Air compressors </li></ul></ul></ul><ul><ul><ul><li>Boilers </li></ul></ul></ul><ul><ul><ul><li>Chiller plants </li></ul></ul></ul><ul><ul><ul><li>Pumps </li></ul></ul></ul><ul><ul><ul><li>Diesel engine </li></ul></ul></ul><ul><ul><ul><li>E OT crane </li></ul></ul></ul><ul><ul><ul><li>Arc furnaces </li></ul></ul></ul><ul><ul><ul><li>A/C Plant </li></ul></ul></ul>
  10. 10. MACHINERY BREAKDOWN – Exclusions <ul><ul><ul><li>Damage due to fire related perils </li></ul></ul></ul><ul><ul><ul><li>War & nuclear events </li></ul></ul></ul><ul><ul><ul><li>Damage due to overload experiments </li></ul></ul></ul><ul><ul><ul><li>Gradually developing flaws, cracks </li></ul></ul></ul><ul><ul><ul><li>Wear & tear </li></ul></ul></ul><ul><ul><ul><li>Willful act, gross negligence </li></ul></ul></ul><ul><ul><ul><li>Pre - existing defects known to insured </li></ul></ul></ul>
  11. 11. MACHINERY BREAKDOWN – Special Exclusions <ul><ul><ul><li>Excess or deductible </li></ul></ul></ul><ul><ul><ul><li>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 non-metallic lining or coating of metal parts </li></ul></ul></ul><ul><ul><ul><li>Parts under manufacturers guarantee </li></ul></ul></ul>
  12. 12. INFORMATION REQUIRED FOR MBD <ul><li>Full nameplate details of the machine </li></ul><ul><ul><li>HP / KW / PSI / KVA / RPM </li></ul></ul><ul><ul><li>Manufacturer’s name, </li></ul></ul><ul><ul><li>Type, year of manufacture, </li></ul></ul><ul><ul><li>Serial number </li></ul></ul><ul><li>And such other identification details are required to be submitted to the insurer, </li></ul><ul><li>Risk inspection is carried out by insurers to ascertain: </li></ul><ul><ul><li>Physical condition of equipment </li></ul></ul><ul><ul><li>Loss history </li></ul></ul><ul><ul><li>Maintenance practices, spares availability etc. </li></ul></ul><ul><ul><li>Unconventional features </li></ul></ul><ul><ul><li>Plant configuration,overhauling details etc </li></ul></ul>
  13. 13. BASIS OF SUM INSURED <ul><li>SUM INSURED SHOULD BE THE REPLACEMENT VALUE OF THE EQUIPMENTS INCLUDING THE COST OF DUTIES PAID, FREIGHT CHARGES AND ERECTION COST. </li></ul>
  14. 14. DEDUCTIBLES
  15. 15. Other Deductibles / Warranties <ul><li>Apart from the standard Excess, Depreciation / Deduction applicable on the Equipments based on the Endorsements provided in Tariff </li></ul>
  16. 16. MACHINERY BREAKDOWN – Extensions <ul><li>Insured’s own surrounding property (25% of Avg MB rate) </li></ul><ul><li>THIRD PARTY LIABILITY (-do-) </li></ul><ul><li>Express freight, overtime, holiday wages etc. (Avg MB rate) </li></ul><ul><li>Air freight (5%) </li></ul><ul><li>Additional Custom Duty (2%) </li></ul><ul><li>Machinery breakdown cover is quite popular in following industries </li></ul><ul><ul><li>Power generation /distribution </li></ul></ul><ul><ul><li>Chemicals / pharmaceuticals </li></ul></ul><ul><ul><li>Steel / Paper / Cement / Printing </li></ul></ul>
  17. 17. INDEMNITY CONDITION <ul><li>PARTIAL LOSS : WHERE INSURERS WILL SETTLE THE CLAIM WITHOUT CONSIDERING THE DEPRECIATION. </li></ul><ul><li>TOTAL LOSS : WHERE IN INSURERS WILL SETTLE THE CLAIMS AFTER DEDUCTING THE DEPRECIATION. </li></ul>
  18. 18. Claims Requirements <ul><li>In event of claim the following requirements are basic for claim processing </li></ul><ul><ul><li>Claim Intimation </li></ul></ul><ul><ul><li>Claim Form </li></ul></ul><ul><ul><li>Copies of log books </li></ul></ul><ul><ul><li>Estimate of damage </li></ul></ul><ul><ul><li>Cause of damage to the machinery </li></ul></ul><ul><ul><li>Service Engineer’s report stating the cause of loss </li></ul></ul><ul><ul><li>Parts testing report by manufacturer stating the cause not attributable to manufacturing defect </li></ul></ul><ul><ul><li>New purchase cost with installation of a new machinery/part of the same configuration </li></ul></ul><ul><ul><li>Repair Bills </li></ul></ul><ul><ul><li>Payment Receipts </li></ul></ul>
  19. 19. <ul><li>********************** </li></ul><ul><li>THANK YOU </li></ul><ul><li>********************** </li></ul>

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