What is Contractors Plant and Machinery Insurance Policy?
By Okbima 16 Jan 2023 59

What is Contractors Plant and Machinery Insurance Policy?


Almost every project necessitates the use of several types of equipment and gear. The kind and type of equipment used in a project might vary depending on the nature, type, and location of the project, as well as at different stages of the project. Cranes, compressors, road rollers, vibrators, welding sets, hydraulic excavators, and other similar equipment may be used. While a contractor’s Plant and Machinery can be covered under an EAR or CAR Policy at specific project sites, Contractors’ Plant and Machinery (CPM) Insurance is designed to give annual coverage to a contractor who may use his plant and machinery on multiple projects throughout the year.


Why do you need Contractors Plant and Machinery Insurance Policy?

The Contractors Plant and Machinery Insurance Policy protects the insured’s machinery, such as cranes, bulldozers, and compressors, from damage or loss. The benefit of this insurance coverage is that it covers the insured’s machines regardless of whether they are in use, at rest, or dismantled for cleaning purposes.


What are included in Contractors Plant and Machinery Insurance Policy?

It’s an All-Risk Policy, which means it covers everything unless what’s specifically excluded. Some of the notable areas that the policy covers are the following: –

  1. Fire and Lightning.
  2. Accidental damage like defective workmanship and material, lack of skill, Negligence, Malicious act or Human error.     
  3. Water damage, Flood, Storm, Tempest, Inundation.      
  4. Collapse, Collision, Impact. 
  5. Theft & Burglary.
  6. Subsidence, landslide, Rockslide.


What are excluded from the Contractors Plant and Machinery Insurance Policy?

The major exclusions from the policy are as follows: –

  1. Earthquake, Terrorism, Nuclear, Inventory loss
  2. Plant and/ or machinery working underground
  3. Pre-existing faults, Willful negligence
  4. Electrical or mechanical breakdown/derangement
  5. Any boiler or pressure vessel exploding
  6. Replacement components and attachments are lost or damaged.
  7. CPM does not apply to pay loaders on barges.
  8. Any type or description of consequential loss or liability
  9. Damages for which the supplier or manufacturer is legally or contractually liable
  10. Unless utilised solely on construction sites, damage to vehicles designed and approved for ordinary road use.
  11. Hull and machinery of waterborne vessels or watercraft are lost or damaged.
  12. Total or partial immersion in tidal waters results in loss or harm.


Are you eligible for Contractors Plant and Machinery Insurance Policy?

The policy can be purchased by the Owner, Equipment’s Lessor, or Hirer (depending on who is legally or contractually responsible for the machinery/equipment). So, if you are one of them, you are highly eligible for the insurance policy.


Are there any added benefits?

Yes! There are quite a few add benefits for you to avail. You can avail the below mentioned added benefits with some minimal charges: –

  1. Air freight, Escalation, Earthquake
  2. Rates of pay for express freight (except air freight), overtime, and holidays
  3. Surrounding property of the owner
  4.  Debris clearance and removal 
  5. Additional customs fee
  6.  Third-party liability
  7. Act of terrorism

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