Machinery Breakdown Insurance

Machinery Breakdown Insurance

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What is Machinery Breakdown Insurance?

Machinery Breakdown Insurance is a type of insurance designed to protect businesses against unexpected mechanical or electrical breakdowns of their machinery and equipment. This policy provides financial protection to cover the repair or replacement costs of the damaged machinery and equipment. Machinery Breakdown Insurance policies can also provide coverage for damage caused by the breakdown, such as interruption to business operations and loss of income. 

Machinery Insurance is an essential type of insurance that can help businesses protect themselves against the high costs associated with repairs and replacements due to mechanical or electrical breakdowns. With the coverage of a comprehensive machinery breakdown insurance policy, you can have peace of mind and have financial security for your business.

Who Needs Machinery Breakdown Insurance?

Any business with machinery or equipment needs a Machinery Breakdown Insurance Policy for protection. Listed below are some types of organisation which require Machinery Breakdown Insurance - 

  • Businesses that rely on machinery, equipment, and other technology for their operations. 
  • Companies that operate in industries with high-risk machineries, such as manufacturing, agriculture, construction, and mining. 
  • Companies with large, expensive machinery or equipment that could be costly to repair or replace. 
  • Businesses that can incur significant financial losses if their machinery suddenly breaks down. 
  • Companies that require specialised machinery, such as those used in medical or industrial settings. 
  • Businesses that operate in areas with frequent electrical outages or other power disruptions.

Why Get Machinery Breakdown Insurance?

Machinery Breakdown Insurance, also known as Machinery Insurance or a Machinery Insurance Policy, covers the repair or replacement costs of machinery and equipment due to mechanical or electrical breakdowns. These plans may also cover the consequential losses that arise from such machinery damage. 

This policy can be beneficial for business owners as it protects their investments in expensive equipment and ensures that any losses due to mechanical or electrical faults are covered. Businesses should consider obtaining a Machinery Breakdown Insurance policy to protect themselves against unexpected losses due to breakdowns so that they can continue operating without disruption. With the right level of protection in place, businesses can feel secure in the knowledge that they would be covered should anything happen to their machinery.

Common Risk Scenarios in Machinery Breakdown Insurance

Given below are the common risk scenarios in the context of Machinery Breakdown Insurance - 

  • Short circuits and electrical problems 
  • Mechanical faults such as If an unexpected machinery breakdown 
  • Damage from pressure systems 
  • Damage from the impact of motor vehicles 
  • Material damage

Major Inclusions of Machinery Breakdown Insurance

Listed below are the general inclusions of Machinery Breakdown Insurance policy - 

  • Damage to machinery, plant, and equipment caused by sudden and unforeseen physical events such as lightning, earthquake, fire, flood, or explosion.
  • Damage caused by internal breakdown or overload of machinery or equipment due to accidental electrical or mechanical breakdown.
  • Loss of revenue resulting from the interruption of business operations due to machinery breakdown.
  • Costs associated with replacing any damaged parts or materials to repair the damaged machinery or equipment.
  • Cost of hiring specialist contractors or experts to repair the machinery or equipment.
  • Costs involved in the removal of debris and site clearance in the event of an insured loss.
  • The cost of relocation and reinstatement of the machinery or equipment in its original position.

Major Exclusions of Machinery Breakdown Insurance

With a Machinery Breakdown Insurance policy, one cannot avail of coverage in case of any damage due to normal wear and tear, malicious or intentional damage, war, terrorism, or natural disasters. Listed below are some general exclusions of machinery breakdown insurance - 

  • War and nuclear perils. 
  • Wear and tear, gradual deterioration, and corrosion of machinery. 
  • Loss due to consequential damage, such as delay in delivery. 
  • Any defect or error in the design and manufacturing of the machinery. 
  • Electrical arcing and short-circuiting. 
  • Any kind of loss due to electricity failure. 
  • Any cost incurred for the dismantling and re-erection of machinery. 
  • Any loss or damage caused due to negligence or improper operation of the machinery.

Which Factors Affect the Pricing of Machinery Breakdown Insurance?

Discussed below are the factors that determine the cost of a Machinery Breakdown Insurance policy - 

  • The type and value of machinery being insured 
  • Machinery's age and condition as well as the area in which it is being operated 
  • Type of coverage that you opt for and the amount of machinery breakdown insurance coverage that you require 

A comprehensive Machinery Breakdown Insurance policy generally costs more than a basic Machinery Insurance policy. However, the comprehensive plan provides more extensive coverage as well.

When choosing a Machinery Insurance policy, it is essential to compare different policies and be aware of your organisation’s requirements so that you get the best plan that suits your needs.

Machinery breakdown can have a detrimental effect on industries that depend on expensive equipment, as it can disrupt their business activity. The repair and replacement of such machinery becomes essential to resume activity. A machinery breakdown insurance policy, in such cases, can prove helpful as it can cover the major expenses here. 

At Policybazaar UAE, we understand the importance of a customised insurance plan for your requirements. With our world-class, cost-effective risk management strategies and solutions through insurance, you can enjoy peace of mind and focus on fulfilling your goals.


Q1. What is Machinery Breakdown Insurance in UAE?

Ans: Machinery Breakdown Insurance financially protects businesses from any unforeseen damages to the machinery and equipment due to accidents and breakdowns. These policies cover the major expenses associated with repairing machinery and ensure the continuity of operations in case of any mishaps.

Q2. Who is eligible for Machinery Breakdown Insurance in the UAE?

Ans: Machinery Breakdown Insurance in UAE is designed for businesses whose day-to-day operations rely on machinery and equipment. Some examples of such businesses are construction companies, manufacturing plants, power plants, and so on.

Q3. What benefits will I get if I opt for Machinery Breakdown Insurance?

Ans: With Machinery Breakdown Insurance, you can avail of the following benefits -

  1. Protection against financial losses
  2. 24/7 coverage for losses
  3. Potential risk assessment 
  4. Customisable coverage as per business needs
  5. Faster claim processing
Q4. How can I assess the premium for Machinery Breakdown Insurance?

Ans: The premium for Machine Breakdown Insurance is based on factors like the value and type of machinery to be insured, the scope of coverage needed, and all the potential risks associated with the operation of the machinery.

Q5. What can I expect to be covered in Machinery Breakdown Insurance?

Ans: Machinery Breakdown Insurance covers any sudden damage to the machinery due to mechanical failure, electrical mishap, human error, and other unexpected events. In such cases, the policy bears the cost of replacement and repair of the damaged equipment or any loss of income or expenses that took place there in.

Q6. What are the possible exclusions in the Machinery Breakdown Insurance cover?

Ans: Some events that are not covered in Machinery Breakdown Insurance include normal wear and tear of machinery, corrosion, moderate deterioration, and more.

Q7. What types of machinery are considered in Machinery Breakdown Insurance?

Ans: These policies cover a wide range of machinery used across various industrial units like turbines, compressors, generators, pumps, boilers, elevators, and other equipment mentioned in the policy.