For nearly 150 years, Engineering insurers have been providing a range of inspection services and insurance covers. Initially activity was limited to inspection services but it has developed over the years to include insurance cover, ranging from breakdown cover on a single item of machinery to complex covers on an ‘all risks’ basis for large building contracts.
In fact Engineering Insurance covers anything which involves the construction of buildings and structures, movement or in service operation of plant and machinery or the use of computers and other electronic equipment; from the humble air receiver to the sophisticated computer.
Engineering covers can also be extended to resultant loss of profit or revenue following loss or damage. For the most part, risks insured in the engineering and property departments complement each other, although there are occasionally areas where they may overlap.
COVERS AND SERVICES PROVIDED
The various services and covers provided by engineering insurers can be considered under the following categories.
Traditionally, certain types of plant and machinery have been included and considered under the heading ‘inspected classes’ and this is because, in addition to an insurance cover, insurers have provided an inspection service. It includes:
- Boiler and pressure plant
- Lifts, cranes and lifting machinery
- Electrical and mechanical plant
Inspections have to be conducted under various pieces of legislation including the Provision and Use of Work Equipment Regulations (1998): Lifting Equipment and Lifting Operations Regulations (1998): Pressure Systems Safety Regulations (2000): Electricity at Work Regulations (1989) and Control of Substances Hazardous to Health (1999) among others.
It is possible to purchase an “Inspection only” policy but where there is Insurance Cover it is, generally, breakdown or sudden and unforeseen damage excluding fire and related perils and theft.
MACHINERY: SUDDEN AND UNFORESEEN DAMAGE
These policies provide an insurance cover in respect of machinery, plant and property that is used at a static location and/or goods in the course of manufacture.
DETERIORATION OF STOCK
This covers the insurance of foodstuffs which are stored in refrigerated conditions in specially constructed rooms or containers.
The insurance of consequential losses resulting from breakdown or accidental damage to installed plant and machinery or the failure of the electricity, gas or water supply.
COMPUTER AND ELECTRONIC POLICIES
This covers the insurance of computer and ancillary equipment for:
- Loss or damage to the equipment
- Recompilation of computer media following corruption following corruption Additional expenditure
- Additional expenditure
The Electronic Equipment Policy provides cover for specialist electronic equipment other than computers. This includes audio visual, medical and telecommunications equipment.
These are policies written on an ‘all risks’ basis covering risks associated with construction projects, installation and movement of machinery and contractors plant
This category deals with contractors whose machinery and plant (where owned, hired in or hired out) is of a portable nature and is used at various locations throughout the country.
CONTRACTORS ALL RISKS
This covers the construction of buildings or structures, or work on existing buildings or structures. The policy provides cover for the contract works risk and excludes any property, which existed prior to the work commencing.
ERECTION ALL RISKS AND MACHINERY MOVEMENT
These are risks involving the installation of new machinery and plant or the dismantling, removal, transit, testing, and/or reinstallation of existing machinery or plant.
BASIS OF SETTLEMENT
Engineering polices can be underwritten on an “Any one accident” basis, Full Sum Insured, First Loss, or Agreed sum insured basis, dependent upon the scope, size and geographical spread of the insured.