Contractor’s Plant and Machinery Insurance

Plant and machinery of a contractor, like earth moving equipment, cranes, drilling machines, dumpers, etc., involved in the construction and erection site are often exposed to numerous risks and hazards, including natural calamities. As a result, any damage or loss that happens can result in huge loss of money.

To stay safe from financial losses, the Contractor’s Plant & Machinery Insurance Policy acts as a robust safeguard. Contractor’s Plant & Machinery Insurance Policy refers to a policy that provides financial coverage of machinery and plant against damages or losses.

The policy also comes with an option that covers third-party claims pertaining to property damage or bodily injury.

Why Is It Essential?

Civil or building contractors are dependent highly on machinery or plant for their works. While some have their own, others have them hired. Any damage or loss to them can cause heavy loss that will drastically reduce the amount of investment.

What’s covered

The insurance policy covers:

  • Covers accidental physical damage or loss caused at the project site.
  • Covers partial and total damage to machinery or equipment.
  • Covers the machinery whilst at the project site ,whether they are at work, or being dismantled for overhauling or cleaning purposes, or at rest.

The insurance is offered as per the existing replacement value of the machinery.

What’s not covered

The insurance policy does not cover:

  • Any kind of mechanical or electrical breakdown, breakage, or failure.
  • Any kind of damage that occurs due to the explosion of any pressure vessel or boiler.
  • Any machinery other than tunnel boring machines working underground.
  • Vehicles that are designed and licensed for normal on-road use under a motor policy.
  • Damage or loss that occurs due to partial or tidal immersion in the tidal waves.
  • Damages that happen due to acts of terrorism.
  • Damages for which the manufacturer or supplier is responsible.
  • Wilful act on the part of the insured or insured’s authorised representative.
  • Any kind of consequential loss.
  • Pre-existing faults and damages.
  • Exchangeable parts and tools viz., belts, ropes, chains, blades, conveyor belts and similar other parts.
  • Nuclear reaction/radiation, radioactive contamination, War, Warlike Operations.

Who Can Buy The Insurance Policy?

Any individual or an organisation who is a:

  • Owner of the Plant and Machinery.
  • Bank and Financial Institution investing in the project.

Amount of Sum That Can Be Insured

The amount of sum that can be insured will be equal to the cost of replacement of each item by a new item of the same kind and capacity. This means the current new replacement cost will include customs duty, ordinary freight, cost of erection, and other charges if any.


The amount of premium depends on the kind of equipment, use of equipment, location, underwriting requirements, and risk that is entailed with it.

Policy Duration

The duration period of the insurance policy is 1 year. Every year, the policy needs to be renewed, for continuing to avail the benefits.