Machinery Insurance

Machinery insurance, Since all the toughest jobs on any construction site are done by the equipment and tools, so any damage caused to these machinery can result in catastrophic loss. Therefore, contractor’s plant & machinery insurance are introduced in order to provide cover to the machinery and plants against any damage or physical loss.

Salient Features of Plant and Machinery Insurance: 

 Following are the key features of the Plant and Machinery Insurance:

  • It is designed for covering loss or damage to various plants and machinery used on project sites.
  • There is an option to cover only selected machinery under the policy.
Why Is It Required?

Every civil or building contractor is highly dependent on the machinery or plant for work. Some of the contractors hire these machinery or plants whereas some have their own. However, any damage or loss to any machinery involved in construction can result in a heavy loss as these machines represent a huge amount of investment.

Having plant and machinery investment keeps the contractor relaxed as his/her machinery are protected against any loss or damage. Therefore, building contractors are always recommended to opt for plant and machinery insurance. Some of the benefits that contractor gets with this insurance policy are:

  • Under this plan, most of the insurance providers broadly cover damage or loss incurred to the mobile constriction equipment like compressors, crane, bulldozer, excavators, etc. because of an accident arising due to external perils.
  • A contractor’s plant & machinery insurance plan remains operative for all the items insured, whether these items are at work, being dismantled for overhauling or cleaning purposes, or are at rest.
  • Provides complete coverage for both partial and total damage to machinery or equipment.
  • Insurance is offered as per the current replacement value of the machinery.
What does it cover?

The Plant and Machinery Insurance covers the following:

  • The plan broadly covers loss or damage to the contractor’s construction mobile equipment, such as cranes, compressors, bulldozers and excavators due to an accident arising out of external perils.
  • The cover is operative while the insured property is at work or at rest, or being dismantled for the purpose of cleaning or overhauling, or during subsequent re-erection.
Add on Covers

On payment of additional premium, you can opt for the following covers:

  • Express freight
  • Air freight Owner’s
  • surrounding property
  • Clearance and removal of debris
  • Additional custom duty
  • Escalation
  • Earthquake
  • Third party liability
  • Equipment mounted on floating vessel/craft
  • Terrorism
What is not covered in Plant and Machinery Insurance?

The common exclusions are:

  • Mechanical or electrical breakdown, breakage, or failure.
  • Pre-existing faults and damages.
  • Damages incurred due to the explosion of any pressure vessel or boiler.
  • Vehicles that are designed and licensed for normal on-road use.
  • Replaceable attachments and parts such as drills, knives, bits, saw, moulds, cutting edge parts, etc. which by default suffer from a higher rate of depreciation or wear.
  • When the plants or machinery are on public roads.
  • Deterioration of machinery due to lack of use.
  • Water-borne crafts or vessels. Damage or loss incurred due to partial or total immersion in the tidal waves. Machinery other than tunnel boring machines working underground. Nuclear perils, war or warlike operations. When the machine is undergoing any test. Any kind of consequential loss. Damage incurred due to terrorism. Damage for which the supplier or manufacturer is responsible. Negligence or willful act of the insured or insured’s representative.
Who can take the insurance?

Anyone of the following parties can take the insurance, either individually or jointly:

  • Owner of the plant and machines
  • Banks and financial institutions investing in the project
  • The contractor or the user of the construction machinery

Sum insured

The sum insured will be equal to the cost of replacement of each item by a new item of the same kind and capacity, which means current new replacement cost will include ordinary freight, customs duty, other charges if any, and cost of erection.


The premium depends on the type of equipment, use of equipment, location, and risk you are entailing.

How to make a claim?

In the event of any loss or damage, follow the below mentioned steps:

  • Inform insurance company immediately
  • Extend full cooperation to the surveyor deputed by the company
  • Submit duly filled claim form, along with necessary documents, to substantiate the financial loss suffered because of the accident

Get financial advice because,


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