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Contractor's Plant and Machinery Insurance

For machinery owners and contractors, this policy provides compensation against potential losses due to equipment damage.

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What Is

Contractor’s Plant and Machinery Insurance?

Contractor's plant and machinery insurance (CPM) is a specialized insurance for contractors and construction companies. It protects against damage or loss to the machinery and equipment used in construction sites and factories. It covers a wide range of both owned and hired-in equipment such as:

Bulldozers

Bulldozers

Loaders

Loaders

Cranes

Cranes

Compressors

Compressors

Generators

Generators

Excavators

Excavators

It also covers third-party claims against property damage and bodily injury caused at the insured construction site during the tenure of the policy.

Features of Contractor’s Plant and Machinery Insurance

It is designed for covering loss or damage to various plants and machinery used on construction sites

Most of the policies have the option to cover only selected machinery under the policy

The insurance premium depends on the type of equipment, use of equipment, location, and risk you are entailing

Who Needs

Contractor’s Plant and Machinery Insurance?

Anyone of the following parties can take CPM insurance, either individually or jointly

  • Contractors and construction companies
  • Equipment rental companies
  • Individual equipment owners
  • Bank and financial institutions investing in the project

Why Get

Contractor’s Plant and Machinery Insurance?

Construction contractors rely heavily on machinery and equipment for their work. Some contractors choose to rent these machines, while others own them. However, if any of these machines get damaged or lost during construction, it can lead to a significant financial loss because these machines require a substantial investment.

A CPM (Construction Plant and Machinery) policy provides insurance coverage for the damage or loss of construction equipment such as compressors, cranes, bulldozers, and excavators. This coverage applies to accidents caused by external events like fires, riots, strikes, vandalism, storms, floods, earthquakes, and so on. Whether the equipment is actively being used, undergoing maintenance, or simply at rest, this insurance policy protects against both partial and total damage.

Coverages & Exclusions in

Contractor’s Plant and Machinery Insurance
CoveragesExclusions
Contractor’s plant and machinery (CPM) insurance provides coverage for the risks associated with machinery and equipment used by contractors in construction projects. Here are some common coverages typically included in this insurance policy:
Clearance and Removal of Debris
In the event of a covered loss, this add-on coverage provides reimbursement for the costs incurred in removing debris resulting from the damage to insured machinery and equipment.
Transit Coverage
This coverage extends protection to the insured machinery and equipment during transit, including loading and unloading, between different project sites or locations.
Plant and Machinery Cover for Physical Damage
This coverage protects the insured contractor against accidental physical loss or damage to the insured machinery and equipment. It includes coverage for covered perils such as fire, theft, flood, vandalism, accidental damage, and more. This coverage applies to items in use or at rest, or when they are being dismantled or cleaned, or when they are subsequently erected.

Contractor’s Plant and Machinery Insurance Examples

Incident 1Incident 2
Damaged Machinery Claim at BMRCL Site
Bangalore Metro Rail Corporation Limited (BMRCL) deployed nine Tunnel Boring Machines (TBM) last year to dig tunnels between Dairy Circle and Nagawara. Rudra, one of the Tunnel Boring Machines (TBMs) faced a huge pile of garbage which caught the cutter head of the machine, preventing it from moving. Luckily, 6 months later, the machine achieved a breakthrough and tunneled towards Langford Metro station.However, in such cases, there is a high probability that the machine can have severe damage. Not only this, there could be multiple instances such as landslides, earthquakes, or fire incidents which can also lead to damage to the heavy machinery used in construction projects. Here, the Contractor's Plant & Machinery (CPM) Insurance Policy comes to the rescue of the contractor. The policy covers the cost of repairs or replacement of the damaged machinery.

About Contractor’s Plant and Machinery Insurance

What is the full form of CPM insurance? Plus Icon
What is floater cover in CPM policy? Plus Icon
What is the difference between peril and coverage? Plus Icon
What perils are covered under the contractor’s plant and machinery insurance? Plus Icon
What is the duration of the contractor's plant and machinery insurance policy? Plus Icon
Is plant and machinery a liability or asset? Plus Icon
Who can take the contractor's plant and machinery insurance policy? Plus Icon
What are the additional add-ons one should purchase along with this policy? Plus Icon
Is it necessary to always update my insurance provider when my contact information changes? Plus Icon
How to make an insurance claim for contractor’s plant and machinery? Plus Icon
Should I inform the company if my old machine/equipment is replaced by a new machine of the same type and model? Plus Icon

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This is an article by YouStory written by Palak Agarwal and published on October, 2022

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