Contractor Plant and Machinery Insurance

The construction business, involving the building of structures, roads, factories and bridges, are large scale projects. Those in this business make use of heavy machinery and equipment to undertake a multitude of construction jobs. If anything were to happen to this equipment and machinery, all parties involved would suffer, causing inconvenience all around. A Contractor’s Plant and Machinery Insurance provides cover for such associated exigencies.


A Contractor’s Plant and Machinery(CPM) Policy covers all your primarily movable plant equipment and machinery against damage or loss in case of an accident. Machines such as bulldozers, cranes, and excavators etc. come under the policy and are offered repair or replacement in case of damage, so one can resume work as soon as possible.

The sum insured under the policy shall be equal to the replacement cost of each item insured, considering the replacement is done by a new item of the same kind, size and capacity. It should also include the freight costs, cost of erection, customs duty and any other charges involved.

The premium to be paid for the policy may differ in each case, depending on several factors such as the type of equipment, location(s), risk involved and the use of equipment. Full description with identification no. of every piece of equipment with valuation should be declared.

Anyone who owns movable construction machinery or is a contractor, bank or financial institution with interest in such machinery, can make use of this policy.

Contractor Plant and Machinery Insurance policy will protect you against any unexpected physical loss or sudden damage caused to your machinery, the coverage will be in effect whether the machinery is working or at rest or even while being dismantled for overhauling or cleaning and during subsequent re-erection.

Add-ons & Extensions

If you pay an additional premium, the policy can be extended to cover damages caused due to or in situations listed below:

  • Express freight, overtime and holiday rates of wages
  • Air freight
  • Your surrounding property
  • Clearance and removal of debris
  • Additional customs duty
  • Escalation
  • Third party liability
  • Earthquake
  • Act of terrorism

In addition, you can also avail machinery breakdown insurance, machinery loss of profits insurance as extensions to this cover, to provide a comprehensive cover to your machinery.


There are specific risks not covered by the policy, which are:

  • Contractual liability or manufacturer’s guarantee
  • War, warlike operations and nuclear perils
  • Damage to exchangeable tools or parts
  • Any fault or defect existing at the time the policy commences
  • Loss or damage due to explosion of any boiler or pressure vessel, subject to internal steam or fluid pressure, or of any internal combustion engine
  • Loss or damage due to abandonment of any plant and/or machinery working in underground mines or tunnels
  • Loss or damage discovered only at the time of taking an inventory
  • Public liability while the plant and machinery are on public roads
  • Loss or damage while in transit from one location to another
  • Loss or damage due to total or partial immersion in tidal waters
  • Gross negligence
  • Damage due to wear and tear, corrosion, rust, etc.
  • Terrorism, unless specifically covered
  • Transit risks from site to site, unless waived