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LIC Product and Forms
LIC OF INDIA
 
General Insurance >> Engineering Insurance >> Contractor's Plant & Machinery (CPM)

Whilst it is possible to have the Contractor’s plant and machinery covered under an EAR or CAR policy at specific project sites, CPM policy has been designed to provide a cover on an annual basis to a contractor who may be using his plant and machinery at different projects during the course of the year. The cover under a CPM policy is not limited to a specific project site and is operative at all sites wherever the plant and machinery is in use and even while the same is lying at the contractor’s own premises. We therefore have to ensure that all the sites where the insured items are being used are mentioned on the face of the policy.

Scope Available Under Cpm Policy

The Contractor's plant and machinery insurance comes under the policies available under the Project Insurance and like the EAR / CAR Policy offers a comprehensive cover as given below:

Fire, lightning, external explosion, earthquake, flood, inundation, subsidence, landslide and rockslide.
Storm, tempest, hurricane, typhoon and tornado.
Burglary, theft, riot and strike and malicious damage.
Accidental damage while at work due to faulty man - handling, dropping or falling, collapse, collision and impact.

Exclusions

The insurer will not indemnify in respect of loss or damage given below:

Excess as stated in the policy schedule, which has to be borne by the insured in any one occurrence. If more than one item is lost or damaged in one the occurrence insured has to bear the highest single excess applicable to such items.

Loss or damage due to electrical or mechanical breakdown, failure breakage or derangement freezing of coolant or other fluid, defective lubrication or lack of oil or coolant, but if as a consequence of such breakdown or derangement an accident occurs causing external damage, such consequential damage will be indemnifiable.

Loss of or damage to replaceable parts and attachments such as bits, drills, knives or other cutting edges, saw blades, dies, moulds, patterns, pulverizing and crushing surfaces, screens and sieves, ropes, belts, chains, elevator, and conveyor bands, batteries, tyres, connecting wires and cables, flexible pipes, joining and packing material.

Loss or damage due to explosion of any boiler or pressure vessel subject to internal steam or fluid pressure or of any internal combustion engine.

Loss of or damage to vehicles designed and licensed for general road use unless these vehicles are exclusively used on construction sites.

Loss or damage to the hull and machinery of water borne vessels.
Loss or damage while in transit from one location to another location.
Loss or damage due to wear and tear corrosion, rust etc.
Loss occurring while an insured item is undergoing any test.
Loss to any plant or machinery working underground.
Losses arising out of war and war like perils and due to nuclear radiation or radio active contamination.

Damage due to faults or defects existing at the time of commencement of the policy with the knowledge of the insured.

Any willful act or gross negligence of the insured resulting in a loss.
Loss for which the supplier or the manufacturer is responsible.
Loss discovered only at the time of taking the inventory or during routine servicing.
Loss to plant and machinery mounted or operated on a floating vessel / barge.

Claim Procedure

Claims under this policy may arise due to many causes, e.g. fire, riot, flood, storm, earthquake, theft, accidental damage to contractors plant and machinery. Proper claims forms should be used when processing the claims. The insurer is not liable for additional cost incurred for alteration or improvement carried out at the time of repairs.

Insurers generally insist upon immediate notification of any claim for this class of insurance in order that the cause and circumstances of the loss may be ascertained and repair / replacement costs checked.

All theft claims require careful investigation conjunction with the local police authority. Losses discovered only at the time of taking inventory are not covered under this policy. Salvage materials should be disposed off, preferably on 'as is where is' basis at best available prices and this will minimize the loss to a certain extent.

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