Denny Insurance Company Kuching Sarawak Malaysia

Engineering Insurance

	Contractor's All Risk Insurance
	Electronic Equipment Insurance
	Boiler & Pressure Vessel Insurance
	Machinery Breakdown Insurance
	Loss of Profit following Machinery Breakdown Insurance

CONTRACTOR'S ALL RISK / ERECTION ALL RISK INSURANCE

Introduction

Buildings, Plant and Machinery have to be erected/installed before commercial production could take place. During the construction/installation period, insurance protection is needed until the buildings/ plant and machinery are finally handed over to the Principal by the contractor.

Insured

The Principal/ Main Contractors/ Sub-contractors f.t.r.r.& i.

Cover

Section I - Material Damage
This section of the insurance covers the contract works (Buildings, Plant and Machinery) of the Insured against any unforeseen and sudden physical loss or damage from any cause e.g. fire, lightning, collapse, collision, impact, malicious damage, theft/ burglary, flood, windstorm and most form of accidental damage unless specifically excluded.

Section II - Third Party Liability
This section of the insurance covers the liability of the Insured against any liability in respect of third party bodily injury or property damage arising out and in the course of the construction works.

In case of plant and machinery, the policy can be extended to cover testing and expires after the first test operation or test loading is completed, or after taking over or expiry date of the policy whichever shall be earlier.

Duration Of Cover

The cover commences directly upon commencement of work or after the unloading of the property insured at the contract site and expires for parts of the insured contract works taken over or put into service or expiry date of the policy whichever shall be earlier

Major Exclusion (Section I & II)

(a)	The deductible stated in the Schedule to be borne by the Insured in any one occurrence
(b)	Consequential loss of any king or description whatsoever including penalties, losses due to delay, lack of performance, loss of contract
(c)	Loss or damage due to faulty design
(d)	The cost of replacement, repair or rectification of defective material and/or workmanship, but this exclusion shall be limited to the items immediately affected and shall not be deemed to excluded loss of road damage to correctly executed items resulting from an accident due to such defective material and/or workmanship
(e)	Wear and tear, corrosion, oxidation, deterioration due to lack of use and normal atmospheric conditions
(f)	Mechanical and/or electrical breakdown or derangement of construction plant, equipment and construction machinery
(g)	Loss of or damage to vehicles licensed for general road use or water borne vessels or aircraft
(h)	Loss of or damage to files, drawings, accounts, bills, currency, stamps, deeds, evidences of debt, notes, securities, cheques
(i)	Loss or damage discovered only at the time of taking inventory
(j)	Any accidents caused by vehicles licensed for general road use or by waterborne vessel or aircraft
(k)	Any agreement by the Insured to pay any sum by way of indemnity or otherwise unless such liability would have attached also in the absence of such agreement
(l)	Others

Interest Insured

Section I - Material Damage
Contract works which consists of the full value of the contract works (Buildings, Plant & Machinery) at the completion of the construction/ installation. This valuation would include freight, customs dues and construction costs. It is common practice for the principal to supply the contractor with material on "free issue" to be built into the contract works. The value of such materials would not be reflected in the contract price and so the sum insured should be appropriately increased.

Section II - Third Party Liability
Liability to third party bodily injury or property damage claim.

Special Points

(a)	Constructional plant and equipment such as site offices, site power generating equipment, scaffolding, air compressors, welding equipment, concrete silos and mixers may be included, in a separate sum insured representing the new replacement value of such equipment.
(b)	Construction Machinery. Defined as all "plant and machinery" which renders its service only when moving and under control of an operator e.g. cranes, bulldozers, excavators, graders, loaders, pile driving & pile extracting units, trucks/lorries, site railways, concrete pumping plant. When on site, construction machinery may be insured under the policy. In such cases a complete list of these items showing the new replacement values is to be appended to the policy.
(c)	Debris clearance. The cost of debris removal following an accident is part of the claim under the policy to the extent that it is necessary before repairs may be put in hand. General debris removal costs for site clearance may be insured as a separate item under the policy.
(d)	Expediting. The insurance may be extended for additional premium to cover the extra cost of overtime rates of wages, express delivery, air freight, etc. in connection with repairs or replacements indemnifiable under the policy.
(e)	Insured's surrounding property. When the insurance includes the interest of the purchaser and involves extensions to or work adjoining existing premises, there is a risk of such premises and their contents being damaged as a result of accidents arising out of the construction operations.
(f)	Temporary works. Works constructed by the Insured on site to facilitate construction of the permanent contract works including coffer dams, shuttering, temporary diversions of waterways, etc. are exposed to the same hazards as the contract works. These temporary works may also be insured and the sum insured should be suitably increased to include their value.
(g)	Third Party liability. Where the contract wording stipulates that the insurance is to be for joint interests (principal, contractor and subcontractors) the third party insurance is granted to each party separately. This allows one insured party to take action against another and seek indemnity under the policy. However, persons occupied on the construction site are not covered under the policy against accidents at work if they are or could have been insured under Workmen's Compensation and/or Employer's Liability insurance.
(h)	Maintenance. Section I of the policy can be extended to cover, to a certain extent, loss of or damage to the construction/erection works occurring during this period.

Information /Details Required For Quotation Purpose

(a)	Contract Value together with its breakdown details (Buildings, plant & machinery)
(b)	Period of Insurance
(c)	Period of Maintenance Cover
(d)	Name of Main Contractor
(e)	Third Party Limit of Liability
(f)	Work Schedule
(g)	Details surrounding property
(h)	Location map
(i)	Tender documents

ELECTRONIC EQUIPMENT INSURANCE

Introduction

This class of insurance is specially designed to cover the computer systems and is divided into 3 main sections namely Section I (Material Damage), Section II (External Data Media) and Section III (Increased Cost of Working).

Cover

Section I (Material Damage)
The Insurer will indemnify the Insured against any unforeseen and sudden physical loss or damage to the interest insured from any cause, other than those specifically excluded from the policy.

Section II (External Data Media)
The Insurer will indemnify the Insured if the external data media entered in the Schedule inclusive of information stored thereon shall suffer any material damage covered by Section I, the cost of restoring the Insured external data media by replacing lost or damaged data media by new material and reproducing lost information.
Subject to special exclusions to Section II.

Section III (Increased Cost of Working)
The Insurer will indemnify the Insured for any additional expenditure incurred for the use of substitute EDP equipment not covered under this policy up to an amount not exceeding the agreed sum insured entered in the Schedule provided cause of damage/lost is indemnifiable by Section I of the policy.

Interest Insured
Section I: On all computer systems
Section II: External data media
Section III: Increased cost of working

Major Exclusions
1) Wilful act or wilful negligence of the Insured or his representatives
2) War and kindred risks
3) Wear and tear
4) Loss or damage for which the manufacturer or supplier is responsible either by law or under contract
5) Others

BOILER & PRESSURE VESSEL INSURANCE

Introduction
Boiler & pressure vessels for industrial use are normally covered under the Fire & Extraneous Perils Insurance. However, the explosion risks of boiler is excluded from the Fire Insurance and thence the risk has to be covered under the Boiler Insurance.

Cover
Damage (other than by fire) to the boiler or pressure vessel cause by and solely due to explosion or collapse as defined in the policy whilst in the course of ordinary working.

Interest Insured
On boiler and pressure vessel

Major Exclusions
1) Normal wear and tear
2) Damage and/or liability cause by the wilful neglect of the Insured
3) War and kindred risks
4) Perils insured by the Fire & Extraneous policy
5) Others

MACHINERY BREAKDOWN INSURANCE

Introduction

All plants and machineries are susceptible to breakdowns or extraneous damages regardless of the care taken during operation or the standard of maintenance. Breakdown or extraneous damage can result from defective material or design of machinery, bad workmanship, carelessness, short circuit or other fortuitous causes. These damages are costly to repair and in exceptional cases, a major breakdown may result in a total loss. For some high technology or heavy machinery of high value, the potential loss can amount to millions of ringgit.

Cover
This form of cover protects against unforeseen and sudden physical loss or damage to machineries from cause such as defects in casting and materials, faulty design, faults at workshop or in erection, bad workmanship, lack of skill, carelessness, shortage of water in boiler, physical explosion, tearing apart on account of centrifugal force, short circuit or from any other cause not specifically excluded from the policy. The cover is operative whilst the machineries are working, or at rest, or being dismantled for cleaning or overhauling. Machineries will only be insured after successful completion of their performance acceptance test.

Machineries Commonly Insured under Machinery Insurance
This form of cover is suitable for machinery that have moving parts or which stores or transmits large amount of energy. The following are examples of such machineries:-

1) Boilers, heat exchangers, condensers
2) Pumps and compressors
3) AC and DC motors
4) Diesel and petrol engines
5) Steam and gas turbines
6) Alternators, motor generators
7) Switchgears, transformers, capacitors
8) Overhead cranes, lifts, escalators
9) Process equipment such as paper mill, plastic extruder, cement mil, screw press, agitated tank, etc

Major Exclusions

	Damage due to fire and extraneous perils. These perils are more appropriately covered under Fire policy.
	Damage to exchangeable tools, machinery parts which suffer a high rate of wear and tear or damage as a direct consequence of the continual influence of operation. These losses are in the nature of trade risks and maintenance cost, associated with the proper operation and care of machineries and should be borne by the Insured.
	Loss or damage for which a supplier, contractor or repairer is responsible either by law or under contract.
	Consequential loss or liability of any kind
	War and kindred risks
	Others

LOSS OF PROFIT FOLLOWING MACHINERY BREAKDOWN INSURANCE

Introduction

Damage to machinery will cause interference to the production. In cases where critical machineries are affected, the factory can suffer severe stoppages. This will result in loss of earnings whilst standing charges continue to be incurred. This form of insurance provides cover against loss of gross profit following indemnifiable damage to machinery. In the majority of cases, the loss of gross profit out of damage to machinery far exceeds the cost of repair or replacement.

Cover

The policy covers loss of Gross Profit following an indemnifiable accident (the cover usually follows that of the machinery breakdown policy) and is measured on the reduction in turnover compared to the same period in the last twelve months and applying the Rate of Gross Profit. Cover also extends to include Additional Expenditure reasonably incurred to minimise the loss of Gross Profit. The costs of non productive wages can be included either as treating them as a standing charge, or taking out more specific covers such as Dual Wages. Professional accountants' charges to produce certified details for the Insured's presentation of a claim can be included.

Interest Insured

	On Gross Profit
	On Wages/ Salaries
	On Auditors' Fees

Major Exclusions

	Loss or damage due to fire and extraneous perils.
	Loss or damage due to the imposition of abnormal conditions directly or indirectly from testing, intentional overloading or experiments.
	Loss or damage for which a supplier, contractor or repairer is responsible either by law or under contract.
	Loss or damage caused by any faults or defects existing at the time of commencement of this policy with in the knowledge of the Insured or his representatives, whether such faults or defects were known to the Insurers or not.
	War and kindred risks
	Wear and tear
	Others