Machinery Breakdown Insurance
If your business or organization owns, operates or depends upon some type of equipment to generate revenue, you need machinery breakdown insurance. Do you use electricity? Do you heat, cool or refrigerate your premises? Do you have communication networks? Do you manufacture or process goods? Do you use equipment to sell, deliver service or help you keep track of sales? Do you use hot water? If so, you need the best machinery breakdown insurance South Africa offers.
Engineering Insurance Examples
The broadcast, publishing and production industries are just one non-traditional example of industries with a need to insure against loss arising from mechanical breakdown electrical currents, off-premises power failure arching and electrical disturbance. We normally think of this type of coverage when it comes to insuring a computer. But why wouldn't other critical high value equipment such as broadcast antennas or towers, camera packages, edit suites, desktop publishing and printing equipment share these same coverage issues? In fact, with computer technology is so intertwined, it's increasingly difficult to discern where the "computer" stops and today's state-of-the-art production, telecommunications and publishing equipment takes over. Machinery breakdown insurance covers many types of equipment. It protects electrical systems, air conditioning and refrigeration; mechanical equipment, modern office and production related equipment in addition to heating systems such as boilers.
How is Machinery Breakdown Insurance different from warranties or service contracts?
Warranties and service contracts are important but they don't cover many of the common causes of machinery breakdowns. Maintenance contracts cover routine service such as cleaning or adjustment. But they don't pay for damage due to operator error, the cause of over 35% of machinery breakdowns. Machinery Breakdown insurance does. Warranties and maintenance contracts also don't pay for business interruption or income loss resulting from breakdown. Nor do they pay for spoilage, damage to surrounding property or extra expenses to restore operations. Machinery Breakdown insurance can cover all these risks.
Machinery Breakdown
You should consider the most comprehensive machinery breakdown insurance South Africa affords if you own machinery or a plant that has the propensity to fail. The failure may be relatively small or conversely can verge on the disastrous. For example, a bearing may fail on a compressor, which is of little consequence but, as often happens, the bearing could cause further resultant damage to the crankshaft, conrods, pistons etc. and then the failure can become very serious indeed.
The Working Risk
Firstly, physical loss or damage must arise. Secondly, there must be an incident i.e. the loss or damage must be sudden and unforeseen (not maintenance related) and thirdly the loss or damage must be of a mechanical or electrical nature
The Non-working Risk
Again the above three criteria apply but this time the loss or damage can arise whilst the machinery or plant is at rest, or whilst being reassembled all within your premises.
Examples
Collapse of boilers, breakage of shafts, gearing. transformers, open circuits over flashover, puncture or breakdown of insulation, electrical surge or overpressure, internal overheating and also damage caused by non-operation of protective devices, excessive stresses or fatigue, defective material or design or incorrect assembly, inadequate lubrication, faulty balance, alignment or adjustment, impact
Loss of Profits following MB
In order for any business to start production there are certain services that are vital to any process of manufacture. Depending on the product, the basic services can be any combination of electricity, steam, gas, water or compressed air. The starting point is therefore the machinery, which causes the disruption of these services. Taking electricity as an example, there could be high-tension switchgear, transformers, low-tension switchgear, cabling and electrical distribution boards. Failure of this equipment, particularly the high-/low-tension switchgear and the transformer will halt production completely. This consequent reduction in turnover could be business threatening.
Machinery Breakdown Insurance Cover
The machinery breakdown insurance policy faithfully follows the property insured under the Machinery Breakdown policy. In other words, if you have failed to cover the breakdown risk under the Machinery Breakdown section the resultant reduction in turnover is not claimable under this policy in terms of a plant and machinery breakdown loss.
Deterioration of Stock
Primarily, this type of insurance is an extension to the Machinery Breakdown policy. The cover is restricted to deterioration or putrefaction of perishable commodities which by their very nature, require a controlled environment to retain their normal marketable condition.
The important point to bear in mind is that cover is restricted to insurance provided under the Machinery Breakdown policy where there must be an admitted indemnifiable claim before this policy comes into operation.
Find out more about securing the best machinery breakdown insurance in South Africa by calling one of our informed and professional engineering insurance brokers.
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