Machinery and Equipment used in various industries are exposed to unforeseen risks and sudden mechanical or electrical breakdowns resulting in loss or damage. Such losses may be repairable or may sometimes need replacement.
Machinery Breakdown is designed to provide coverage for machinery against any unforeseen and sudden physical loss or damage necessitating its repair or replacement due to causes such as
- Defects in casting in material
- Faulty design
- Faults at workshop or in erection
- Bad workmanship or lack of skill
- Negligence
- Explosion
Risks Covered
- Policy covers Contractor’s Plant and Machinery against any unforeseen and sudden Physical loss or damage
- Electrical or mechanical breakdown but except those specifically excluded under the terms of the Policy.
Major Exclusions
- Normal wear and tear
- War, terrorism and sabotage
Period of Insurance
The coverage is usually provided for a period of one year.
Basis of Sum Insured
Sum insured for this insurance should be the replacement cost including freight, duty, cost of erection and other dues.
Deductible
A deductible for each and every loss under the policy is always applicable.
Premium Rate
Premium rates are based on:
- Replacement value of Plant & machinery
- Model
- Type of Machinery
- Age of the machinery
- Maintenance history
- Use of the machine
- Professional experience of the assured
- Standard of the management
Important Information
Please note that for the easy understanding of the insurance policy, we have highlighted the important aspects. We will be glad to receive your queries and discuss the full set of policy terms, conditions and exclusions.
For more information, please contact Nasco Gulf at +971 4 351 8610.
Basis of Claim Settlement
The indemnity under the policy is for replacement or repair of the damaged machinery.
If the sum insured is found to be inadequate, the policy will pay in such proportion as the sum actually insured bears to the sum actually should have been insured.
You must alert us of any accident that may lead to a claim covered under the policy, and our team of experts will assist you in the quick settlement of the claim.
For more information, please contact Nasco Gulf at +971 4 351 8610.
Loss of Profit following Machinery Breakdown
The consequential loss following a breakdown of any machinery, plant or equipment due to a sudden and unforeseen event would sometimes be worse than the extent of physical damage.
Production and business might come to a standstill but fixed expenses such as salary, wages, interest on capital, rent etc., will continue to be incurred, resulting in loss of gross profits and increased cost of working during the interruption period.
Loss of Profits following Machinery Breakdown insurance is designed to provide coverage for actual loss of profits, sustained as a result of business interruption caused by a peril covered under the Machinery Breakdown Insurance Policy.
Above expenses can be covered by a Business Interruption Insurance policy.
In order for a “Business Interruption cover” to operate, it is compulsory to have a Machinery Breakdown Insurance Policy.
This cover takes into consideration the following aspects which should be addressed when opting for this cover:
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GROSS PROFIT |
The sum produced by adding the standing charges to the net profit.
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NET PROFIT |
The Net Trading Profit (exclusive of all Capital receipts and accretions and all outlay properly chargeable to Capital) resulting from the business of the insured at the premises after due provision has been made for all standing and other charges including depreciation.
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STANDING CHARGES |
Interest, Rent, Bank Charges, Insurance Premium, Advertising, Printing, Stationery, Electricity, Travelling Expenses, Maintenance of Plant and Machinery, Depreciation of Building, Plant and Motor Vehicles etc.
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TURNOVER |
The Money paid or payable to the entrepreneurs for goods sold and delivered and for services rendered in course of the business at the premises during a financial year.
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PERIOD OF INDEMNITY |
Whilst the period of insurance is 12 months, the indemnity period differs. This would depend on the period the insured would need to prepare to come back to the position they were before the loss in terms of both property and trading.
Reasonably the periods would be anything between six to eighteen months.
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Limit of Indemnity
The limit is worked out based on the Indemnity amount payable by the insurers which will be in respect of
- Reduction in Turnover
- Increase in cost of working
Deductible
Policy always has a time deductible applicable on each and every loss.
Premium Rate
Premium rates are based on:
- Limit of indemnity
- Period of indemnity
- Policy deductibles
- Type of equipment covered
- Physical features of equipment covered
- Criticality of the equipment in overall production
- Time to repair or replace the damaged equipment
- Values at risk
- Nature of risk
- Location
- Industrial experience of the assured
- Management and housekeeping
Important Information
Please note that for the easy understanding of the insurance policy, we have highlighted the important aspects. We will be glad to receive your queries and discuss the full set of policy terms, conditions and exclusions.
For more information, please contact Nasco Gulf at +971 4 351 8610.
Claims Settlement
You must alert us of any accident that may lead to a claim covered under the policy, and our team of experts will assist you in the quick settlement of the claim.
Call us as soon as possible, in case of an accident, and our team of experts will guide you through the claim process. For more information, please contact Nasco Gulf at +971 4 351 8610