Sharing with you about Engineering Insurance

Engineering Insurance
courtesy of Tokio Marine Insurans (M) Bhd, www.tokiomarine.com.my

Overview
Engineering insurance is mainly confined to 2 main categories: construction insurances and machinery insurances. Construction insurances encompass construction of buildings, roads, bridges, erection of plant and machinery, etc. Whereas machinery insurances provides protection against loss of or damage following breakdown and/or accidental damage to all kinds of plant and machinery including loss of profits therefrom.

Machinery Breakdown Loss of Profit Insurance

Under the Machinery Breakdown insurance, indemnity is provided in respect of damaged or destroyed machinery. However, material loss is not the only loss sustained by the Insured in the event of a loss or damage to the insured machinery, since in most cases, a material loss also causes interruption or interference to the Insured’s business operations. This is due to the time spent in arranging the repairs, awaiting delivery of replacement parts, starting up the plant and re-activating the production and so forth.

The end result is a financial loss to the insured in the form of loss of profits and increased costs of working. In many cases, the loss sustained as a result of interruption to the business operations by far exceeds the material loss suffered by the Insured. The Machinery breakdown loss of profits is the protection against the financial consequence of the material damage happening.

The policy insures loss of Gross Profit following an accident or breakdown of the machinery which is indemnifiable under the Machinery Breakdown insurance policy.