Buy Machinery Breakdown Insurance Policy: Meaning, Coverage & Importance

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What is Machinery Breakdown Insurance?

A Machinery Breakdown Insurance policy ensures that the insurer covers any unforeseen damage caused to the insured machinery while at work or rest. Digit’s Machinery Breakdown Insurance policy will cover the cost incurred for repairing or replacing the damaged parts of the insured machinery for reasons other than those specifically excluded. The policy will apply to the insured items after the successful completion of their performance tests, irrespective of whether they are at work or rest.

What’s Covered under Digit’s Machinery Breakdown Insurance Policy?

Digit’s Machinery Breakdown Insurance policy indemnify the Insured against unforeseen and sudden physical damage by any cause not hereinafter excluded to any insured property specified whilst in the premises therein mentioned necessitating its immediate repair or replacement.

What’s not covered?

Digit’s Machinery Breakdown Insurance policy does not offer coverage for damage caused for the following reasons:

Damage or loss caused to the machinery or parts of it, directly or indirectly, because of fire and it’s allied peril.
Loss/damage caused because of war, invasion, hostilities from foreign enemy, civil war, rebellion, riots, strikes, etc.
Damage caused due to nuclear reaction, nuclear radiation or radioactive contamination.
Damage caused due to gradually developing flaws, cracks in the machine or partial fractures which needed to be repaired or renewed.
Loss incurred due to deterioration or normal wear and tear of any part of the machinery because of normal use and exposure.

Loss or damage caused due to explosions in Chemical Recovery boilers, other than pressure explosions for e.g., smelt, chemical, ignition, Explosions etc.
Liability caused due to defects existing at the time of commencement of the insurance policy.
Damage or loss caused due to wilful act or neglect or gross negligence.
Loss or damage for which the property’s manufacturer/supplier/repairer is responsible either by law or contract.
Every claim where more than one or more item is damaged in one occurrence.

Damage caused to things like belts, chains, cutters, objects made of glass, parts not made of metal, exchangeable tools, etc.
Accident, Loss, damage/and/or liability resulting from over load experiments or tests requiring

Who needs Machinery Breakdown Insurance Policy?

An insurance policy of Machinery Breakdown is needed by organizations, factories, industries and entities that use machinery in their day-to-day business.

The insurance policy covers businesses losses due to sudden breakdowns or damage caused to the machinery. It can be in the form of money needed to repair or replace the damaged parts or the entire machinery itself.

How is the premium calculated for Machinery Breakdown Insurance Policy?

The payable premium for availing a Machinery Breakdown insurance policy is calculated after taking into account several factors like age of the machinery, depreciation of the machinery, and number of add-ons opted for. The number of add-ons the policyholder opts for in addition to the central policy plays an important part in the calculation of the payable premium.

FAQs About Machinery Breakdown Insurance

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Does the policy of Machinery Breakdown Insurance cover damage caused to the machinery because of the operator’s negligence?

Damage caused because of the operator’s negligence is not covered by the insurer under the Machinery Breakdown policy.

What documents are required while filing a claim under the Machinery Breakdown insurance policy?

While filing a claim, the minimum documents which need to be submitted by the policyholder are – the policy document, warranty certificate, survey report, machinery repair order, machinery repair bills, machinery delivery order, invoice of the machinery, and engineer’s statement stating the type and level of breakdown.

In case of damage to the machinery, do insurers reimburse partial and total loss?

Yes, a Machinery Breakdown Insurance policy offered by insurers covers both partial and total loss. In case of partial loss to the machinery, the coverage will include the total cost of parts, charges incurred for dismantling and re-erection of the machinery, custom duty, air-freight charges and labour charges. While for total loss, the actual value of the items before the damage minus the depreciation value is covered.

Disclaimer - The article is for informational purpose, collected across the Internet and with respect to Digit’s Policy Wordings document. For detailed coverage, exclusions, and conditions about Digit’s Machinery Breakdown Insurance Policy (UIN: IRDAN158RP0021V02201920), go through your policy document carefully.