What is Engineering Insurance
Content
What is Engineering Insurance?
This insurance covers you against misfortunes such as machinery breakdown, business interruption, deterioration of stock, engineering transit, dismantling and erection and accidental damage to electronic equipment, mobile plant and construction work. All engineering material damage policies are policies of indemnity. Naturally there are definitions on these policies, which are a little out of the ordinary dictated by the type of cover underwritten. Engineering Insurance policies provide “All Risk” type covers. This means that almost any sudden & unforeseen physical loss or damage occurring during the period of insurance to the property insured is indemnifiable (payable by insurers.) In essence, every hazard is covered which is not specifically excluded.
Who needs Engineering Insurance?
Financiers, Developers, Owners, Principals, Employers, Purchasers, Main Contractors, SubContractors, Supplier-Installers who are involved in: The construction or erection of all types of civil, electrical, mechanical engineering projects. The managing and on-going operation of these types of industrial developments/projects. The use/operating or leasing (hiring-out) of Contractor’s Plant and Machinery. Companies operating in the fields of civil, electronic, mechanical or structural engineering.
Why should you take out Engineering Insurance?
Unfortunately accidents can happen & there can be sudden & unforeseen loss or damages to the Works/Projects under construction. Example: Brought about by a fire, theft, storm, hail, collapse etc. You need to be covered for accidental, sudden & unforeseen loss or damage to the completed & handed over Works/Projects. Example: Brought about by mechanical and/or electrical breakdown or derangement etc. There could be possibilities of resultant loss of gross profit, loss of rent, loss of revenue, and/or increase cost of working etc. Consequential losses stemming from engineering damage in the form of loss of profits, deterioration of stock, temporary hiring fees and increased cost of working. Construction Risks: Roads, bridges, factories, mines, airports, houses, buildings or power stations
Working Risks: Computers, X-ray and scanning machines, mines, engineering works, glass works, manufacturing operations, machinery of varying descriptions, clothing and furniture, food and beverage processing, frozen foodstuffs and the meat industry.
How much does Engineering Insurance cost?
We have a large book of clients with many different insurance companies, so we will be able to find the most beneficial policy with the cheapest premiums for your business.
Typical claims incurred on Engineering Insurance
Sudden accidental & unforeseen physical loss of or damage to machinery & plant arising from mechanical/electrical breakdown, whilst in operation, at rest, or during reciting or reerection, at the client’s premises. Consequential loss of gross profit, loss of revenue or increased costs of working, arising form indemnifiable loss or damage sustained under the Machinery Breakdown policy. Damage to stock of all descriptions caused by a change in the controlled environment of the holding rooms or chambers, arising from indemnifiable damage to the insured machinery that creates the controlled environment. Accidental loss of or damage to plant and machinery during the operations insured against, including dismantling, movement, loading, transit, offloading, re-erection etc. Primarily an impact cover causing loss or damage to the clients own plant and machinery, to goods being manufacture, or to goods under the custody & control of the client. Loss of or damage to Computer & Electronic Data Processing Equipment and associated ancillary equipment arising from Fire and Allied Perils. Loss of or damage to construction plant & equipment from any cause whilst in storage, transit, on site & being use as a tool of trade.Wh
Definition of 'Nonperforming Asset'
A debt obligation where the borrower has not paid any previously agreed upon interest and principal repayments to the designated lender for an extended period of time. The nonperforming asset is therefore not yielding any income to the lender in the form of principal and interest payments.
Investopedia explains 'Nonperforming Asset'
For example, a mortgage in default would be considered non-performing. After a prolonged period of non-payment, the lender will force the borrower to liquidate any assets that were pledged as part of the debt agreement. If no assets were pledged, the lenders might write-off the asset as a bad debt and then
sell it at a discount to a collections agency.
Non performing asset. A majority of government-owned banks have seen a steep rise in non-performing assets (NPA) in the last couple of quarters. Let us look at what exactly NPA is and how does it affect you as a bank customer. What is it? For a bank, assets are loans that it gives to individuals and companies and gets regular income from it in the form of interest. When these assets stop generating regular cash flow (or become non-performing), they are known as NPAs. How is it classified? If a loan instalment is not paid for three months or 90 days, it is considered as an NPA. For example, if you have taken an education loan and have been unable to repay the interest or the principal amount for three months, the bank from where you have taken this loan will record it in its books as NPA. If an asset remains non-performing for a period less than or equal to 12 months, it would be classified as a sub-standard asset. These assets attract a provisioning, the money that a bank should set aside to cover potential losses, of 15%. If an asset remains in the sub-standard category for 12 months, it would be considered a doubtful asset with 25-100% provisioning. When an asset is identified uncollectable then it is a loss asset which calls for 100% provisioning. When do NPAs rise? To tame inflation, the Reserve Bank of India (RBI) has tightened the monetary policy 13 times since March 2010. When RBI increases its key policy rates, the banks raise lending rates or an increase loan tenor is possible. Soaring inflation and rising rates have seen the monthly budgets of many households go upside down. This has an immediate impact on the equated monthly instalments (EMIs). When many borrowers default, especially the ones with large credit dues, a bank’s profitability is hit. It needs to be noted here that a majority of NPAs for banks come from small and medium enterprises and companies.
What does it mean for you? If you default and your loan turns into an NPA, the bank will try to recover as much as possible from you. For this, banks usually outsource recovery work to third-party debt recovery companies. Banks are also allowed to acquire assets if the borrower fails to repay. Further, non-repayment can affect your credit score and taking more loans may become a problem for you.
This insurance covers you against misfortunes such as machinery breakdown, business interruption, deterioration of stock, engineering transit, dismantling and erection and accidental damage to electronic equipment, mobile plant and construction work. All engineering material damage policies are policies of indemnity. Naturally there are definitions on these policies, which are a little out of the ordinary dictated by the type of cover underwritten. Engineering Insurance policies provide “All Risk” type covers. This means that almost any sudden & unforeseen physical loss or damage occurring during the period of insurance to the property insured is indemnifiable (payable by insurers.) In essence, every hazard is covered which is not specifically excluded.
Who needs Engineering Insurance?
Financiers, Developers, Owners, Principals, Employers, Purchasers, Main Contractors, SubContractors, Supplier-Installers who are involved in: The construction or erection of all types of civil, electrical, mechanical engineering projects. The managing and on-going operation of these types of industrial developments/projects. The use/operating or leasing (hiring-out) of Contractor’s Plant and Machinery. Companies operating in the fields of civil, electronic, mechanical or structural engineering.
Why should you take out Engineering Insurance?
Unfortunately accidents can happen & there can be sudden & unforeseen loss or damages to the Works/Projects under construction. Example: Brought about by a fire, theft, storm, hail, collapse etc. You need to be covered for accidental, sudden & unforeseen loss or damage to the completed & handed over Works/Projects. Example: Brought about by mechanical and/or electrical breakdown or derangement etc. There could be possibilities of resultant loss of gross profit, loss of rent, loss of revenue, and/or increase cost of working etc. Consequential losses stemming from engineering damage in the form of loss of profits, deterioration of stock, temporary hiring fees and increased cost of working. Construction Risks: Roads, bridges, factories, mines, airports, houses, buildings or power stations
Working Risks: Computers, X-ray and scanning machines, mines, engineering works, glass works, manufacturing operations, machinery of varying descriptions, clothing and furniture, food and beverage processing, frozen foodstuffs and the meat industry.
How much does Engineering Insurance cost?
We have a large book of clients with many different insurance companies, so we will be able to find the most beneficial policy with the cheapest premiums for your business.
Typical claims incurred on Engineering Insurance
Sudden accidental & unforeseen physical loss of or damage to machinery & plant arising from mechanical/electrical breakdown, whilst in operation, at rest, or during reciting or reerection, at the client’s premises. Consequential loss of gross profit, loss of revenue or increased costs of working, arising form indemnifiable loss or damage sustained under the Machinery Breakdown policy. Damage to stock of all descriptions caused by a change in the controlled environment of the holding rooms or chambers, arising from indemnifiable damage to the insured machinery that creates the controlled environment. Accidental loss of or damage to plant and machinery during the operations insured against, including dismantling, movement, loading, transit, offloading, re-erection etc. Primarily an impact cover causing loss or damage to the clients own plant and machinery, to goods being manufacture, or to goods under the custody & control of the client. Loss of or damage to Computer & Electronic Data Processing Equipment and associated ancillary equipment arising from Fire and Allied Perils. Loss of or damage to construction plant & equipment from any cause whilst in storage, transit, on site & being use as a tool of trade.Wh
Definition of 'Nonperforming Asset'
A debt obligation where the borrower has not paid any previously agreed upon interest and principal repayments to the designated lender for an extended period of time. The nonperforming asset is therefore not yielding any income to the lender in the form of principal and interest payments.
Investopedia explains 'Nonperforming Asset'
For example, a mortgage in default would be considered non-performing. After a prolonged period of non-payment, the lender will force the borrower to liquidate any assets that were pledged as part of the debt agreement. If no assets were pledged, the lenders might write-off the asset as a bad debt and then
sell it at a discount to a collections agency.
Non performing asset. A majority of government-owned banks have seen a steep rise in non-performing assets (NPA) in the last couple of quarters. Let us look at what exactly NPA is and how does it affect you as a bank customer. What is it? For a bank, assets are loans that it gives to individuals and companies and gets regular income from it in the form of interest. When these assets stop generating regular cash flow (or become non-performing), they are known as NPAs. How is it classified? If a loan instalment is not paid for three months or 90 days, it is considered as an NPA. For example, if you have taken an education loan and have been unable to repay the interest or the principal amount for three months, the bank from where you have taken this loan will record it in its books as NPA. If an asset remains non-performing for a period less than or equal to 12 months, it would be classified as a sub-standard asset. These assets attract a provisioning, the money that a bank should set aside to cover potential losses, of 15%. If an asset remains in the sub-standard category for 12 months, it would be considered a doubtful asset with 25-100% provisioning. When an asset is identified uncollectable then it is a loss asset which calls for 100% provisioning. When do NPAs rise? To tame inflation, the Reserve Bank of India (RBI) has tightened the monetary policy 13 times since March 2010. When RBI increases its key policy rates, the banks raise lending rates or an increase loan tenor is possible. Soaring inflation and rising rates have seen the monthly budgets of many households go upside down. This has an immediate impact on the equated monthly instalments (EMIs). When many borrowers default, especially the ones with large credit dues, a bank’s profitability is hit. It needs to be noted here that a majority of NPAs for banks come from small and medium enterprises and companies.
What does it mean for you? If you default and your loan turns into an NPA, the bank will try to recover as much as possible from you. For this, banks usually outsource recovery work to third-party debt recovery companies. Banks are also allowed to acquire assets if the borrower fails to repay. Further, non-repayment can affect your credit score and taking more loans may become a problem for you.
