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.
Frequently Asked Questions
We will advise you or the visiting engineer will keep you up to date on what you need to do and what the relevant inspection periods are.
I have a very expensive piece of equipment that the whole of my production is dependent on. Is there a policy that will protect the machine for breakdown and lost production?
Yes. You can arrange cover for “Sudden & Unforeseen Damage” to the machine and for Business Interruption following breakdown.
I need to move and relocate some machinery. Can I get cover for just the move?
Yes, Engineering Insurers can provide cover on a “one off” basis or if you are a company specialising in machinery movement, an annual policy can be arranged.
We will actively manage the claim for you from notification to settlement ensuring minimum interruption to your business.
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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
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.
Erection All Risks & 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.
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A Fair Presentation of the Risk
At the heart of insurance contracts is an obvious truth: you have an enormous advantage over the insurer. You know all about your business, its history, processes, people and management, but the insurer knows nothing – other than what you tell them.
You have a statutory duty to make a fair presentation of the risk. You must tell the insurer:
• Every material circumstance which you know or ought to know and/or
• Sufficient information that would cause the insurer to make further enquiries, if neccessary, to review those material circumstances
• You are deemed to have the knowledge of the company’s senior management.
• You are deemed to have the knowledge of the person arranging the insurance (who is deemed to be a senior manager under statute).
• Anything that can be discovered by a reasonable search.
A failure to make a fair presentation of the risk gives the insurer various remedies, depending upon the nature of the failure, from avoiding the contract and not paying claims to modifying the basis of settlement.
Examples of Misrepresentation
It is often easier to demonstrate the consequences of risk presentation failure by example rather than theory. Here are some real life examples of typically forgotten or unrevealed material facts which later caused huge problems and repudiated claims:
A reprocessing plant did not reveal a series of small fires during their insurance year.
Following repeated false alarms, a retailer didn’t reveal that Police Response had been withdrawn.
A restaurant omitted to reveal repeated minor floods from an upstairs nightclub.
A construction company didn’t reveal potential employee claims recorded in their accident book.
A company failed to reveal written warnings to an employee over repeated dangerous driving.
A company failed to reveal that it had been ‘struck off’ by Companies House and was trading as a new legal entity under a different designation.
Compiling the Risk Presentation: an ongoing process
The compilation of risk information for presentation to an insurer might be thought to be simply contained in a proposal or risk presentation form, however, such forms are not exhaustive and cannot take account of circumstances which change beyond their
compilation. Moreover, merely referring insurers to your website or dumping data is not making a fair presentation of the risk. ’Fairness’ is a subjective test but it would certainly involve simplicity, clarity and relevant selection.
Ongoing communication is vital, because the duty to disclose material circumstances is ongoing throughout the insurance year and at renewal of the insurances.
It is not possible to overstate the importance of researched, adequate risk presentation – there have been countless legal disputes, repudiated claims, ruined businesses and lives arising from the simple failure to reveal all the facts to an insurer. A failure to present risk adequately is a bigger risk than the risk you present.
It doesn’t matter that the failure is innocent, something overlooked, forgotten or discounted as unimportant – it might be important to the insurer, in which case it must be revealed.
Should there be anything not yet disclosed, or that you are unsure would influence your insurers about this insurance tell your broker/insurer immediately.
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Working With Us
The Business Insurance Bureau conducts both client and market research to identify solutions to the needs of an almost exclusively business clientele. We will make a recommendation once we have assessed your demands and needs.
All premiums due to insurers must normally be paid by you on or before the date that cover commences. Where alternative methods of payment are available these will be discussed with you so that arrangements can be put in place by the due date.
We are registered with the Data Protection Registrar. We will ensure that any information obtained from you is treated by us and anyone else involved in arranging, considering to arrange or managing your insurance, as Strictly Private and Confidential. We will not provide your information to anyone else unless we:
have your permission to do so, or -are required to by the FCA, or -are required to do so by law, or -are required to do so in the normal course of arranging or negotiating and maintaining, or renewing financial services products which we may from time to time approve.We take appropriate steps to ensure the security of any money, documents, other property or information handled or held on your behalf.
All information in any form, with the exception of policy documents and certificates issued on behalf of insurers and supplied by us, to you, should be treated as Strictly Private and Confidential and not be released directly or indirectly to any other party, without our explicit consent.
Note: in transacting your insurances with The Business Insurance Bureau, you are deemed to have accepted our Terms of Business. Your accepting of these Terms of Business does not affect your statutory rights.
You must notify us as soon as possible of a claim and circumstances which may give rise to a claim. In the event of a claim you should contact this office and we will promptly advise you and if appropriate, issue you with a claim form and pass all details to your insurer. You should not admit liability or agree to any course of action, other than emergency measures carried out to minimise the loss, until you have an agreement from your insurer. We will remit claims payments to you as soon as possible after they have been received on your behalf. In the event that an insurer becomes insolvent or delays making settlement we do not accept liability for any unpaid amounts.
You would have the right to cancel a policy within 14 days of its inception or upon receipt of the policy documentation whichever is the later. You would as a Consumer and without providing a reason, cancel the policy by confirming this is in writing to the address of our office through which your policy was placed. Any policy documentation and in particular any legal document, i.e. Certificate of Motor Insurance, Employers Liability Certificate, MUST be returned with your instruction to cancel. By exercising your right to cancel the policy, you are withdrawing from the contract of insurance.
Our services may be terminated without cause or penalty by giving one months’ notice in writing. In the event that our services are terminated by you other than at the expiry of the policy we will be entitled to retain any fees and all of the brokerage payable. The responsibility for handling claims reported after the date of termination shall in the absence of an express agreement be the responsibility of the party taking over the role.