Project Insurance
Contractors’ Plant & Machinery (CPM) Insurance
Contractors’ Plant & Machinery (CPM) Insurance is a specialized all-risk policy tailored to safeguard the valuable mobile equipment and heavy machinery used in construction, mining, infrastructure, and related industries. It provides financial protection against accidental damage, fire, theft, natural calamities, overturning, collision, and unforeseen risks—whether the machinery is owned, leased, or hired.
Types of Machinery & Equipment Covered
CPM Insurance covers a wide array of machinery under various categories:
Why is Contractors’ Plant & Machinery (CPM) Insurance Essential?
- Protection Against Accidental Damage
- Financial Security
- Covers Theft & Burglary
- Protection During Operations & Transit
- Essential for Contractual Compliance
Important Things You Should Note
- Covers Owned, Leased & Hired Equipment – Protection extends to rented or third-party machinery.
- Applicable on Various Sites – Covers machinery both on-site and in transit.
- Policy is Equipment-Specific – Each insured machine is listed separately in the policy.
- Does Not Cover General Liabilities – CPM insurance only protects machinery, not third-party liability or workers’ injuries.
- Customizable Add-Ons – Can include coverage for debris removal, airfreight costs, and third-party liabilities.
What is Covered & What is Not Covered?
What is Covered?
- Accidental Damage – Covers losses due to collisions, falls, fire, and overturning.
- Theft & Burglary – Protection against stolen machinery and unauthorized use.
- Natural Disasters – Covers damages from earthquakes, floods, storms, and landslides.
- Fire & Explosion – Includes fires, short circuits, and chemical explosions.
- Damage During Transit – Covers machinery damage while being transported between sites.
What is Not Covered? (Exclusions)
- Wear & Tear – Damage due to aging, corrosion, or gradual deterioration.
- Electrical & Mechanical Breakdown – Internal failures are not covered unless caused by an external accident.
- Negligence & Intentional Damage – If the contractor misuses the equipment, the claim is rejected.
- War, Terrorism & Nuclear Risks – Excludes war-related damages and radiation exposure.
- Damage During Overloading – If machinery is used beyond its designed capacity, it is not covered.
Frequently Asked Questions (FAQs)
Who should buy CPM Insurance?
Construction companies, contractors, plant owners, infrastructure firms, and equipment leasing companies.
Does CPM Insurance cover third-party liabilities?
No, CPM insurance only covers the machinery. For third-party claims, you need a Public Liability or Contractors’ All Risk (CAR) policy.
Can I insure machinery that is leased or rented?
Yes, CPM insurance covers both owned and rented machinery, but leased equipment must be declared in the policy.
Is breakdown due to mechanical failure covered?
No, internal mechanical failures are not covered unless they are caused by an external accident.
How is the premium for CPM Insurance calculated?
Premium is based on machinery type, value, age, project location, and risk exposure.
Does CPM insurance cover machinery while it is in transit to the project
Yes, CPM policy typically covers machinery during transit within the geographical limits specified, unless explicitly excluded. Damage during loading/unloading or due to road accidents can be covered.
Is equipment covered while operating in sub-terrain or underground construction sites?
Some insurers may cover sub-terrain or tunnel operations with special conditions or premium loading. You must declare such usage upfront for the extension.
If a self-propelled machine meets with an accident while moving on road to a site, is it covered?
Yes, if the vehicle is registered as plant/machinery and not under a motor insurance policy, CPM coverage applies. However, road transit for self-propelled vehicles should be explicitly declared in the policy.
Are miscellaneous tools like generators, welding sets, and compressors covered?
Yes, miscellaneous categories such as DG sets, compressors, welding sets, and pumps are generally covered, provided they are listed in the schedule and valued appropriately.
