Comprehensive machinery insurance offers wide and comprehensive protection against property damage and loss of profits for an entire plant and machinery in operation including other property like buildings, stock, goods in process, etc. This new policy is designed to grant cover for entire plants where engineering risks are prevailing, in contrast to industrial all risks covers where the fire exposure and extended perils are of more importance.
CMI is an all risks accident and loss of profits insurance covering any unforeseen and sudden physical loss or damage to the insured plant, necessitating its repair or replacement.
Scope of Cover
Loss or damage covered under Section I of this insurance includes the classical scope of cover under the machinery insurance and extended further to grant protection for plant and machinery mainly against
- Fire, lightning, chemical explosion
- Earthquake, inundation, flood
- Any other cause not specifically excluded
The sum insured should always represent the new replacement value of the property insured.
Section II of CMI comprises the business interruption cover, which provides protection against loss of gross profit and increased cost of working in case the business is interrupted or interfered with as a consequence of loss or damage indemnifiable under Section I.
DETERIORATION OF STOCK FOR COLD STORAGE (DOS)
The insurance of “deterioration of stock in cold storage” is designed to meet the requirements of those who want to insure themselves against deterioration of goods in cold storage due to a breakdown of refrigerating machinery. Deterioration of stock insurance is a complementary cover to machinery insurance and may only be taken out in connection with the latter.
Scope of Cover
There are basically two different methods of preservation: cold storage under freezing conditions and cold storage under cooling conditions.
In the case of cold storage under cooling conditions, a distinction must be made between two types of cold storage: storage in a normal atmosphere and storage in a controlled atmosphere (CA storage). The storage atmosphere in CA storage rooms is different to that of normal atmospheric air and contains approximately 22% carbon dioxide, 4% oxygen and 74% nitrogen.
The insurance of stock in cold storage is important, for example, for
- Owners of cold-storage houses,
- Users (tenants) of cold-storage houses,
- Frms in which agricultural products are manufactured or processed,
- Meat and fish processing industries,
- Food preservation industry,
- Chemical and pharmaceutical industries (finished and semi-finished products).
Causes of an indemnifiable claim for deterioration of stock may be
- A rise or fall in cooling temperature,
- The unforeseen and sudden escape of refrigerants into the cold-storage rooms,
- In the case of CA storage, an incorrect composition of the storage atmosphere directly resulting from any material damage to the refrigeration plant, which is indemnifiable under machinery insurance.
It is possible to extend the deterioration of stock cover to include deterioration due to the failure of the public power supply, provided the position regarding public and back-up power supplies is found to be satisfactory.
