Contractors’ Plant and Machinery All Risks Insurance in the UAE

Contractors’ Plant and Machinery All Risks Insurance, commonly called CPM Insurance, is intended for construction plant, machinery and equipment used at project sites. It may cover eligible sudden and accidental physical loss or damage to items declared in the policy schedule, subject to the issued limits, deductibles, conditions and exclusions.

Cover may be considered for contractor-owned equipment and, where specifically declared and accepted, hired-in plant for which the insured has a contractual responsibility. Each item’s description, identification details, value, location, ownership and use should be accurately disclosed to the insurer.

What CPM Insurance May Cover

Depending on the issued policy, material-damage cover may apply to:

1. Sudden accidental damage: Eligible external physical damage to insured machinery while it is operating, stationary, being cleaned or undergoing routine maintenance at an insured location.
2. Overturning or collision: Accidental physical damage involving declared mobile plant or machinery, subject to the applicable conditions.
3. Fire and external events: Damage caused by an insured event when the cause is covered by the wording and is not excluded.
4. Theft or burglary: Loss may be covered when expressly included and when the policy’s security, evidence and reporting requirements are met.
5. Dismantling and re-erection: Limited cover may apply when these activities are connected with maintenance or movement within an insured site and are permitted by the policy.

The expression “all risks” does not mean that every incident is covered. A claim must involve insured property, occur during the policy period and result from a cause that is not excluded by the issued wording.

Plant and Machinery That May Be Considered

Declared equipment may include:

1. Excavators, bulldozers, graders and loaders.
2. Mobile cranes, tower cranes and lifting equipment.
3. Road rollers, asphalt pavers and road-construction machinery.
4. Compressors, generators, pumps and welding equipment.
5. Concrete mixers, batching equipment and construction machinery.
6. Other specialised plant used for declared construction or engineering work.

Equipment is not automatically insured merely because it is used by the contractor. It should be listed or otherwise included according to the basis stated in the policy. Road-registered vehicles, watercraft, aircraft and equipment used underground, offshore or in other specialised activities may require separate consideration.

Important Policy Conditions

1. Equipment values: Insured values should follow the valuation basis required by the policy, which may be based on replacement cost for equipment of the same type and capacity.
2. Locations and activities: Project sites, storage areas, operating conditions and the intended use of each item should be declared.
3. Operators: Machinery should be operated only by trained, authorised and appropriately licensed personnel.
4. Maintenance: Manufacturer recommendations, inspections, servicing schedules and applicable safety requirements should be followed.
5. Security: Agreed theft-prevention, storage, tracking and site-security measures should remain in place.
6. Material changes: Changes in ownership, values, equipment, location, use or operating conditions should be disclosed to the insurer.

Hired-In Plant and Machinery

Hired-in plant is not automatically covered under every CPM policy. It may be considered when the hire agreement makes the insured responsible for accidental physical loss or damage and the equipment has been declared and accepted.

The policy may not cover every obligation imposed by a hire contract. Continuing hire charges, penalties, loss-of-use charges or liability beyond the equipment’s insured value may require separate agreement.

Transit and Off-Site Use

CPM Insurance does not necessarily cover machinery while it is being transported between locations. Inland transit, loading, unloading and temporary storage may require a specific extension or separate transit insurance.

Equipment taken outside the declared territorial area or used at an undeclared site may also fall outside the policy. Businesses should provide details of expected movement and off-site use when requesting a quotation.

Common Exclusions and Limitations

CPM policies commonly exclude or restrict losses involving:

1. Mechanical or electrical breakdown: Internal breakdown, failure, derangement or malfunction may require Machinery Breakdown Insurance.
2. Wear and tear: Gradual deterioration, corrosion, erosion, fatigue, rust or lack of maintenance.
3. Consumable and replaceable parts: Items such as tyres, cutting tools, belts, batteries and similar parts may be restricted or excluded.
4. Overloading or improper use: Damage resulting from use beyond the equipment’s rated capacity or contrary to manufacturer instructions.
5. Consequential loss: Loss of revenue, profit, production, contracts, hire charges or delay penalties.
6. Excluded events: War, nuclear risks, deliberate acts, confiscation and other exclusions stated in the policy.

The policy may also apply special deductibles or restrictions to theft, overturning, underground work, cranes, equipment operating near water or machinery exposed to particular site conditions.

Optional Extensions

Subject to underwriting acceptance, extensions may be considered for inland transit, debris removal, air freight, express freight, additional customs duties, surrounding property or hired-in plant. Each extension must be expressly included and may have its own limit, deductible and conditions.

The cost of renting replacement machinery and financial loss caused by equipment being unavailable are not automatically covered. Separate business-interruption or increased-cost protection may be required.

What to Do After an Incident

1. Stop using unsafe machinery and protect people at the site.
2. Take reasonable steps to prevent further physical damage.
3. Notify Al Buhaira Insurance as soon as reasonably possible.
4. Report theft, malicious damage or other criminal incidents to the police.
5. Keep damaged machinery and components available for inspection.
6. Retain photographs, operator reports, invoices and maintenance records.
7. Do not approve major repairs or disposal without prior agreement, except for urgent safety measures.

How to Request a Quotation

Businesses can submit their initial information through Al Buhaira Insurance’s dedicated Contractors’ Plant and Machinery quotation page. The assessment may consider the equipment type, age, value, condition, ownership, locations, uses, operating environment, security measures and claims history.

A quotation does not confirm that insurance cover has started. Cover begins only after the required information has been reviewed, the offered terms have been accepted and the applicable policy documents have been issued.

Documents Required

The insurer may request documents and information such as:

1. Completed proposal or quotation form
2. Trade licence and company details
3. Plant and machinery schedule
4. Equipment makes, models and serial numbers
5. Manufacturing years and current equipment ages
6. Replacement values, invoices or valuation documents
7. Ownership or hire agreements
8. Project sites and equipment-location details
9. Description of equipment use and operating conditions
10. Operator qualifications or licensing details
11. Maintenance and inspection records
12. Security, storage and tracking arrangements
13. Required transit or off-site-use details
14. Previous insurance details and claims history

Why Choose Al Buhaira Insurance?

1. Engineering insurance range: Contractors’ Plant and Machinery Insurance is available within Al Buhaira Insurance’s engineering products.
2. Dedicated quotation page: Businesses can submit initial company, project and equipment details online.
3. Equipment-based assessment: Quotations can consider the declared machinery, values, activities, locations and requested extensions.
4. Policy enquiries: Customers may contact Al Buhaira Insurance regarding issued schedules, conditions, deductibles and endorsements.
5. Claims enquiries: Policyholders can report incidents and provide relevant supporting documents for assessment under the issued policy.

Frequently Asked Questions