Contractors Plant and Machinery

Contractors Plant and Machinery (CPM) Insurance is a specialized policy designed to protect plant and machinery owned or hired by contractors against a wide range of risks. These machines, often expensive and essential for construction, mining, and infrastructure projects, are susceptible to damages from accidents, natural disasters, and operational risks.

Key Elements of the Policy

Coverage Offered

  • Damage due to accidents (e.g., collisions, overturning).
  • Natural disasters (e.g., floods, storms, earthquakes).
  • Fire, explosion, or theft.
  • Malicious damage and third-party liabilities (optional in some policies).
  • Transit risks within the project site

Exclusions

  • Normal wear and tear.
  • Wilful negligence or misuse.
  • War or nuclear perils.
  • Pre-existing damage before the policy.

Benefits

  • Minimizes financial loss for contractors.
  • Ensures project continuity by covering unforeseen machine breakdowns or losses.
  • Can be customized to include equipment hired out or equipment in transit.

Case Study: Protection of Heavy Equipment in a Dam Construction Project

The company invested in a CPM Insurance Policy to safeguard its machinery from unexpected damages during the three-year construction period.

  • Scenario: A construction company, XYZ Constructions, was contracted to build a major dam in a remote region. The project required extensive use of heavy machinery such as
  • Excavators .
  • Cranes .
  • Concrete Pumps .
  • Earthmovers.

Challenges Faced

  • The project site was prone to landslides due to the hilly terrain.
  • Unpredictable weather included heavy rains and strong winds.
  • Machinery was required to operate continuously, increasing the risk of accidental damage.

Response by CPM Insurance

Claim Process

  • XYZ Constructions immediately notified their insurance provider.
  • A surveyor is disputed to assess the damages and verify the claim.
  • The policy covered machinery damage caused by natural calamities.

Compensation

  • The insurance company approved a payout covering repair and replacement costs.

Outcome

  • XYZ Constructions resumed operations within two weeks.
  • The financial burden on the company was significantly reduced, preserving cash flow.

Incident & Impact

  • Incident: During the second year of construction, heavy rains caused a landslide at the project site. Several excavators and a concrete pump were buried under debris.
  • Impact: Direct damage to machinery estimated at $1.5 million. A two-week delay in project timelines due to the unavailability of functional equipment.

Conclusion: Your Safety Net for Success

In the high-stakes world of construction, CPM Insurance is more than a policy—it’s peace of mind. By protecting your investments and operations, it ensures that your projects stay on track, no matter what challenges arising