Installing a machine and bringing it into normal operation does not mean that the technical risk has come to an end.
A mechanical or electrical breakdown occurring during normal operation can affect not only the machine itself, but also the business's production or service capacity.
Machinery Breakdown Insurance provides for the repair or replacement costs of sudden and unforeseen physical damage to machinery and plant in normal operation (commissioned) to be assessed within the terms of the policy.
What circumstances may be covered?
Depending on the scope of the policy, physical damage arising from causes such as the following may be covered:
- Operating accidents
- Short circuit
- Voltage fluctuations
- Insulation faults
- Lubrication failures
- Blockage
- Entry of foreign bodies
- Disintegration due to centrifugal force
- Sudden overheating or excessive cooling
- Pressure changes
- Operator error
- Negligence or carelessness
Which machinery can be insured?
Depending on the field of activity, different equipment groups such as the following may be covered:
- Production machinery
- Industrial equipment
- Compressors
- Pumps
- Refrigeration systems
- Generators
- Technical plant
- Service machinery
What Machinery Breakdown Insurance is not
Machinery Breakdown Insurance is not a policy that covers every risk a machine may face unconditionally.
Wear, tear, rust, corrosion and deterioration developing over time are distinct from sudden and unforeseen physical damage.
Fire, theft and certain natural catastrophe risks may also be the subject of separate policies or additional cover.
A machine's function matters as much as its value
Two machines of equal value may not be of equal importance within a business.
While one machine going out of service may affect only a small part of production, the stoppage of another may bring the entire production line to a halt.
For this reason, the assessment takes into account not only the value of the machine, but also its technical function and criticality within the business.