Engineering Insurance

This type of business insurance provides very broad cover for damage to electrical and mechanical machinery and can include engineering inspection, a statutory requirement for certain items of plant; this may also be referred to as Machinery Breakdown or Plant All Risks.

Types of Engineering Insurance Policies

• Storage Cum Erection (all risks)
• Contractor’s All Risks Insurance
• Machinery Breakdown Insurance
• Boiler Explosion
• Electronic Equipment Insurance

Storage Cum Erection (all risks)
Erection All Risks is a comprehensive insurance policy designed to cover the contingencies arising from the time the materials stored at the project site.
The cover continues during the entire period until the project is completed, tested, commissioned and handed over to the insured.  The policy has two sections viz, Section 1- Material Damage and Section II Third Party Liability. Insurers also modify the TPL cover to the insured party named as insured’s under policy schedule as if a separate policy has been issued to each party.

Contractor’s All Risks Insurance
Contractor’s Insurance is designed to insulate independent contractors from financial liability. Since contractors are engaged separately for each individual project, the nature of the insurance varies according the specific requirement. For example, the engineering risks involved in the construction of a small residential complex differ greatly from those encountered to infra project.
The Contractors All Risks policy covers the physical damage to the materials to be used for the project – whether in transit, storage or forming part of the contract works. Aside from risk management for the engineering aspects, contractors can also opt for additional insurance to provide holistic cover for the entire project.

• Liability Insurance – for physical injury and / or damage to property taking place as a result of the contractor’s actions.
• Business Property Insurance – to protect valuable tools and construction equipment from theft / burglary.
• Workers’ Compensation – for injuries or illnesses that occur to employees in the course of employment; may also include sub-contractors.

Machinery Breakdown Insurance
Machinery insurance is important for everyone who operates machinery, i.e. not only for large industrial enterprises using large units or fully automated production plants but above all for medium-sized and small enterprises where a machinery failure may have serious financial and economic consequences. Of course those lending credit for the purchase of machinery and plant also have a strong interest in the effective protection of the objects financed by them.
This is where Machinery Breakdown Insurance plays a critical role. It ought to be noted that different levels of coverage applies to different equipment – mechanical equipment, production machinery, apparatus and auxiliary equipment – may all be shielded against breakdown for repair and/ or replacement.

Boiler Explosion
Most factories and manufacturing plants contain pressure vessels, most commonly boilers. These are known to be sensitive machinery where the slightest fault in calibration can lead to an explosion or implosion. In some cases, government authorities mandate pressure vessels / boilers to be routinely inspected and certified safe. But such inspections may not always bring to light defects and problematic areas, which could prevent accidents. Thus, there is a need to be prepared for damage to surrounding properties and liabilities for injury and / or property damage to third parties.
It must be kept in mind that not only the Boiler and associated pressure vessels but also auxiliaries like economizers, super-heaters and steam / feed piping ought to be covered comprehensively. Insurance cover may be sought for fired and unfired vessels. It is also important to get coverage for both chemically induced explosions and physical explosions.

Electronic Equipment Insurance
Electronic equipment is a fundamental part of almost any commercial enterprise today. Few companies (limited to particular kinds of industries) would have sophisticated and high-level electronic equipment. However, electronic devices such as computers, cellular phones, Fax machines, UPS machines and printers are more or less omni-present. Besides this, there may also be data storage equipment which contains crucial to critical data. All of these risk-prone equipments ought to be insured to prevent unforeseeable incidents from affecting the business process.