Standalone machinery products will often cover events such as mechanical failure, electrical short circuiting or motor burnout, as well as damage resulting from an accidental event, explosion or collapse.

Machinery policies are designed to suit, or can be tailored to suit, a large range of risks, from small manufacturing risks to large Property Owner portfolios.

A property owner with a large portfolio of plant and machinery insured two steam boilers which were originally designed to be fuelled by standard gas oil. However, following modification to the boilers to burn a different type of oil they both started tripping. This was caused by excessively hot flue gas temperatures and the boilers became badly damaged. The client’s Property Engineering Policy was able to meet not only the cost of repairs but also the hire of replacement boilers whilst the property underwent repair.

Unlike a property policy, a machinery policy will cover operator errors. For example, when a machine has been set up incorrectly and damage is then caused when in use.

‘Payments on Account’ extensions are available for business interruption. For example, if there is a loss of rent an interim partial payment can be made before the end of the indemnity period.
 

Lease agreements often state that it is the lessor’s responsibility to repair or replace machinery if it is damaged or destroyed while in their care.

Any downtime for any business can result in a loss of income and/or additional expenditure, and many firms may start to have serious liquidity problems within a few weeks of essential machinery being unavailable.

Your client may be meticulous with their inspections and maintenance programmes, but damage does happen and the consequences can be catastrophic.