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Machinery Breakdown Insurance

Machinery Breakdown insurance provides cover at your premises for Plant and Equipment including Boilers and Pressure vessels against sudden and unforeseen accidental damage resulting from mechanical failure whilst the equipment is in operational or at rest.

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Cover at a glance
  • - Failure of plant and equipment as a result of sudden and unforeseen mechanical failure
  • - Cover can be purchased on individual plant or on a blanket basis
  • - Consumables and service components are not covered; however the resultant damage is covered
  • - Excess/deductibles can be adjusted to cater for your risk appetite
  • - Policy is on a new for old basis if not repairable
  • - Excess can be Monetary or set as a percentage of the sum insured on property damage with the business interruption being set on a time excess

Policy Overview

Machinery Breakdown insurance provides cover at your premises for Plant and Equipment including Boilers and Pressure vessels against sudden and unforeseen accidental damage resulting from mechanical failure whilst the equipment is in operational or at rest. The cover also extends to include mechanical failure whilst being dismantled, relocated, reassembled, cleaned or under inspection.

Following a mechanical failure, insurers will provide an additional limit for expediting expenses to be used for the possibility of temporary repairs and/or the hire of temporary equipment to maintain continuity of the manufacturing process including express freight and additional labour costs.

In general, machinery breakdown provides for loss resulting from mechanical failure not triggered by an event that would otherwise be insured under a property policy. E.g. lightening strike, storm damage (water and wind), fire etc. As such this cover compliments your property insurance policy by providing the additional peace of mind knowing that your property risk mitigation programme has been comprehensively addressed from all facets of loss.

Major Exclusions

  • Loading and unloading on delivery,
  • Breakdown covered under a manufactures warranty,
  • Testing and commissioning and intentional overload,
  • Failure resulting from unsafe operation of the equipment,
  • Consumables and Wear and Tear items that would be replaceable during the servicing process such as Filters, Belts, hoses, brushers, electrical safety equipment such as fuses and other protection equipment, bearings and seals,
  • Loss resulting from rust, oxidisation, corrosion and cavitation.
  • Maintenance works, alterations, improvements, adjustments / recalibration.


  • Electronic Equipment and all other equipment connected to and operating from such electronic equipment and data carrying media,
  • Business Interruption resulting in a reduction of turnover following a mechanical failure.
  • Deterioration of Stock following a breakdown on the premises where there is a rise or fall in the temperature resulting in the stock being compromised.

The information provided on this page that may have been implied is General Advice only and does not take into consideration your specific needs, risk appetite or financial requirements. Please contact our office to discuss and review your needs and the appropriate financial product best suited to meet your requirements . Before purchasing any financial product, you should always read the Product Disclosure Statement to ensure the product is suitable for your needs.

Frequently Asked Questions

How is my premium calculated?
The premium is calculated on your industry sector taking into consideration the age of the equipment, its replacement value, availability and ease of replacement. Some Insurers calculate the limit of indemnity / value as being the total combined value of all buildings, contents and stock.
Does my policy cover New for Old?
Yes, subject to the replacement equipment being of equal quality and similar in specification. For example if you purchased a mid range piece of equipment with standard specs, although the replacement today may be of a higher spec, as long as it is mid range in todays standards, insurers will replace with no requirement for a betterment contribution from the insured.
What happens if the equipment is now obsolete?
Insurers will pay for the closest spec equipment available subject to the sum insured shown in the schedule.
Can Insurers apply depreciation?
Some insurers will consider the expected life of the failed equipment and the preventative maintenance programme in place at the time of the loss and offer a settlement based on the remaining percentage of life expectancy.
Is refrigerant gas and other liquids covered?
Yes, Insurers will pay for the cost of replacing liquids and refrigerant gas for air-conditioning or refrigeration units and transformer oils following mechanical failure, however will not provide cover for loss of liquids resulting from a leak as the cover is based on a “sudden and unforeseen loss”.
Can I adjust my excess?
Yes. The excess is the amount you contribute towards the claim in the event of a loss. We can work with you to determine your risk appetite which influences the excess that you should be selecting. In some cases insurers will impose a minimum level of excess.
Tip - Preventative Maintenance programme
Preventative maintenance programmes can significantly extend the life of the equipment and reduce loss of turnover and the need for business interruption. We highly recommend this as part of your Risk Mitigation Programme.

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