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Bharat Laghu Udyam Suraksha
Dec 9, 2023

Machinery Breakdown Cover in Bharat Laghu Udyam Suraksha: Protect Your Business

The Bharat Laghu Udyam Suraksha Commercial Package Policy offers a comprehensive solution to the insurance needs of businesses categorised as small enterprises under the MSME regulations in India. You can get this policy to ensure enhanced peace of mind about having to deal with some specific threats to your business. There are a number of specific covers offered under this type of general insurance policy, that may pertain to various aspects of business and the types of threats faced. Understanding each of them may help the policyholder understand this policy better. Machinery Breakdown Cover is one such coverage within this commercial package policy that policyholders ought to know about. Here is a look at this cover.

What is the Machinery Breakdown Cover?

Machinery Breakdown Cover, as part of this general insurance policy, provides protection against unexpected or abrupt physical damage to insured machinery and equipment covered under the policy. This coverage comes into play after the successful completion of performance/acceptance tests, whether the machinery is at work, at rest, undergoing maintenance, being dismantled for cleaning or overhauling, or during re-assembly.* Businesses often rely on various machines, which are vital to their operations. In the event of an unforeseen breakdown or damage to these machines, it can lead to substantial financial losses due to repair or replacement costs. The Machinery Breakdown Cover serves as a safety net in such situations, helping businesses quickly recover and resume their operations without bearing the total financial burden.*

What is Included in this Cover?

Under this MSME insurance policy cover, the insurer may provide compensation to the insured party in the event of sudden and unforeseen physical damage to the insured machinery. This compensation can come in the form of payment, reinstatement, or repair to help restore the damaged machinery, specified by the insurer in the policy in accordance with IRDAI guidelines. The coverage applies to specific machinery and equipment listed in the policy schedule, that require prompt repairs or replacement.* This policy covers the insured items after they have successfully completed their performance or acceptance tests. The total compensation provided by the insurance company for any one item cannot exceed the sum insured as specified in the policy schedule unless the sum insured is reinstated after a claim is filed.*

Machinery Breakdown Cover Exclusions

Certain situations and causes are not covered by this policy. These exclusions are as follows:
  1. Damage caused by fire, smoke, lightning, theft, subsidence, landslides, floods, storms, earthquakes, or other natural disasters, as well as damage caused by aircraft or objects dropped from them.
  2. Damage to electrical appliances and installations resulting from issues like overrunning, excessive pressure, short-circuiting, and leakage of electricity. This exclusion is limited to specific electrical components and doesn't apply to other machines or equipment damaged by the resulting fire.
  3. Damage resulting from war, invasion, civil disturbances, or nuclear events.
  4. Damage caused by overloading machinery during experiments or tests that impose abnormal conditions.
  5. Damage that develops gradually over time, like flaws, defects, cracks, or wear and tear that doesn't require immediate stoppage.
  6. Damage caused by the willful act, neglect, or gross negligence of the insured party or their representatives.
  7. Any liability assumed by the insured through agreements, except when such liability would have applied even without an agreement.
  8. Damage due to known faults or defects existing at the start of the insurance and not disclosed to the company.
  9. Loss of use of the insured property or any consequential losses.
  10. Damage due to explosions in chemical recovery boilers (excluding pressure explosions).
  11. A deductible mentioned in the policy schedule that the insured party must bear for each claim. In cases where multiple items are damaged in a single occurrence, the insured will only be responsible for the highest deductible applicable to any one of those items.
  12. Damage to specific components like belts, ropes, chains, rubber tires, dies, blades, cutters, or non-metallic parts.
  13. Damage for which the manufacturer, supplier, or repairer of the property is responsible by law or contract.
These exclusions may be specific to this cover of the policy. For example, fire insurance may be included in another cover of the policy, but the coverage may not extend to machinery. To get a comprehensive look at what the policy has to offer, it is ideal to read through the policy document or consult your insurance provider.* The insured may like to maintain the sum insured to avoid underinsurance and understand that the insurance does not transfer automatically if there's a change in ownership. Obtaining the company's consent is required for the insurance to continue in such cases. Ensure that you read through the policy document and understand all aspects of coverage as well as exclusions once you buy the policy, and before you may file a claim.   *Standard T&C Apply Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

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