1. What is the purpose of taking the CPM Policy?

Contractor’s Plant and Machinery like excavators, rollers, dumpers, earth moving equipments, cranes, drilling machines etc utilized in the construction or Erection site are always exposed to numerous risks and hazards inluding natural calamities. This Insurance provides financial protection against damage to Contractor’s plant machinery equipments whether they are being used or are at work-site or at rest or during their maintenance operations. It also has an option to cover third party claims in respect of property damage or bodily injury arising in connection with the execution of a various construction projects. The major perils covered are as under : 

1. Fire, theft, burglary,
2. RSMD (Riot, Strike, Malicious Damage)
3. Terrorism
4. Earthquake,
5. Storm, Tempest, Cyclone, Flood, Inundation
6. Accidental external damage while at work or rest at site due to faulty handling, impact, collapse, dropping

2. Who all can take CPM Insurance Policy?

 CPM policy is mainly designed to protect the interest of civil contractors owning Contractor’s Plant & Machinery Policy so as to ensure that their equipments are well covered against the damage or destruction related to various civil engineering projects.  

3. What all equipments can be covered under the policy?

 Any contractor’s plant & machinery equipment like excavators, rollers, dumpers, earth moving equipments, cranes, drilling machines etc which are utilized in the construction or Erection site can be covered under this policy. 

4. For what value of machine/equipment the insurance should be purchased?

 It is a requirement of this insurance that the sum insured be equal to the cost of replacement of the equipment by new equipment of the same kind and same capacity, which shall mean its replacement, or reinstatement cost, including freight, custom duties, if any, and erection costs. 

5. Are there any additional covers available in the CPM Insurance policy?

 Yes. Apart from the standard coverages, additional covers are also available as under : – Insured’s own surrounding property cover – Third Party Liability – Express freight overtime & holiday wages (Excluding Air freight) – Air freight – Additional Custom Duty- Escalation 

6. Can I change the Value of Insurance during the currency of the policy?

 Yes. There is a provision in CPM Insurance policy to change the value of machine (Sum Insured) during the currency of policy. You may contact the policy issuing office & make a request. 

7. Am I eligible for a refund if I cancel the policy during the currency of the policy?

 Yes. There is a provision for refund of premium if the policy is cancelled during the currency of the policy.  

8. Will my CPM insurance cover damages to machines while they are undergoing any cleaning or overhauling?

 Yes. This Policy shall apply to the insured items whether they are at work or at rest, or being dismantled for the purpose of cleaning or overhauling, or in the course of the aforesaid operations themselves, or when being shifted within the premises, or during subsequent re-erection, but in any case only after successful commissioning. 

9. Should I inform the Company if my old machine/equipment is replaced by a new identical machine of same type & model?

 Yes. CPM is issued on individual machine basis incorporating the Serial No. of the machines & if the machines are replaced, the Company must be informed immediately. 

10. Can I cover my equipments which are working at multiple locations?

 Yes. CPM Policy can be issued covering equipment on “Anywhere in India basis” with a loading to 10%. However, transit risks from site to site will be excluded.  

11. Can I cover an equipment under this policy which is registered with RTO?

 Yes. In respect of Machinery/ equipments, which are registered with RTO, but engaged at the Project site, the Insured, has an option either to select the Moto or CPM Policy. 

12. Is transit risk (from one site to another site) covered under this policy?

 No. Transit risk from one site to another site is excluded.

Contractor’s Plant & Machinery Insurance Policy

Constructions sites heavily rely on machinery used for day-to-day operations. This includes jobs like hauling and moving material, excavating earth and debris, round-the-clock generation of power etc. The Contractor’s Plant and Machinery Insurance Policy is a hassle-free protecting solution that covers your machinery, minimising repair costs.

The Contractor’s Plant and Machinery Insurance Policy is specially designed to protect the interest of Civil Contractors.

Features of the Contractor’s Plant and Machinery Insurance Policy

• The policy broadly covers loss or damage to the contractor’s construction module equipment such as bulldozers, cranes, excavators, compressors, etc., due to an Accident arising out of external perils.
• The cover is also applicable when the insured machinery is or is not being used and when it is being dismantled for the purpose of cleaning or overhauling, or during the process of re-erection
• Unlike the All Risk Insurance Policy, the Contractor’s Plant and Machinery Policy will insure the policy holder as per the actual cost of each piece of machinery.
• This policy will cover other expenses like labour charges, freight, customs duty, re-erection or dismantling costs.
• This policy takes into consideration the value of the items before the occurrence of damage/loss.
• If under insured, claim will be paid only on proportionate basis

Additional Cover Options

• Owners surrounding policy
• Clearance and removal of debris
• Additional customs duty
• Express freight
• Air freight
• Dismantling and shifting to a new location
• Escalation of cost
• Earthquake
• Third Party Liability
  • For any one accident
  • For all accidents during the period

Exceptions to the Contractor’s Plant and Machinery Insurance Policy

• The Excess as stated in the Schedule
• The Contractor’s Plant and Machinery Insurance Policy will not cover losses or damage caused due to electrical or mechanical failure.
• Replaceable parts like drill bits, saw blades, dies, moulds etc are not covered under this policy.
• Damage or loss caused due to explosion of a pressure vessel like a boiler are not covered under this policy.
• Vehicles deployed by a contracting company are not covered by this policy unless the vehicles in question are exclusively meant for the construction site.
• Location of the construction site plays a huge role in determining coverage – any sort of loss or damage due to partial or total immersion in tidal waters is not covered by the CPMP.
• Wear and tear, corrosion, rust or deterioration of a machine due to weather conditions or simply from lack of usage are not covered under this insurance policy.
• Loss of or damage to plant and/or machinery working underground. (This does not apply to machineries used in tunneling works).
• Other occurrences/events not covered by the Contractor’s Plant and Machine Insurance Policy are –
  • War and nuclear perils
  • Willful act/negligence of the insured
  • Contractual liability, manufacturers guarantee
  • Consequential loss or liability of any kind or description

Sum Insured and Premium

Unlike the Contractor’s All Risk Insurance Policy, the sum insured on the Contractor’s Plant and Machinery Insurance Policy is calculated differently. It does not take into consideration the total value of the project, rather it determines the sum insured on the value of each piece of machinery. It takes into consideration the cost of replacing a damaged piece of machinery with a new piece. Ideally, the sum insured should also include other costs like freight costs, cost of erection, customs duty etc.

The premium will vary from policy to policy as it factors in types of equipment, location of construction, estimated risk and use of equipment.