Know More About Machinery Breakdown Insurance in Australia

Machinery breakdown insurance is a package that will cover your mechanical equipment, machinery, factory plants, tools, and work during an operation or a project. Learn more reasons why you need insurance here.


This is all-risk accident insurance for the machinery. The policy will essentially cover against unforeseen and sudden physical loss that will damage your equipment and affect your work. Some are specific for maintenance, such as overhauling, inspection, cleaning, and shifting many parts in the process. Most of the unforeseen and sudden damages maybe because of the following:

  • Faulty construction, design, and material
  • Malalignment, mal-adjustment, and vibrations
  • Loosening of some parts, defective lubrication, self-heating centrifugal force, molecular fatigue, and abnormal stress
  • Excess in electrical pressure because of the environment
  • Arcing or short-circuit situations
  • Carelessness and lack of skill in handling these machines

Range of Machines that are Covered

  • Process Machinery: Cold stores, pulp or paper making, plastics, textiles. Rubber, engineering, and metals.
  • Mechanical Plants: Include presses, turbines, engines, water, gas, steam blowers, compressors, etc.
  • Electrical Equipment: These may include switchgear, rectifiers, motors, generators, alternators, and transformers

Basis of the Insured Sum

The insured sum will mean that you will be able to replace the machinery as long as it is the same capacity, kind, and price. You may also find ones like the Fast Machinery breakdown insurance that covers custom duties, dues, freight costs, and base prices in Australia. It is worth noting that the price will vary, so it’s best to discuss your options with a legitimate company first.


Some Exclusions that May Be Included

  • Wear and tear because of boiler scale, corrosion, erosion, and cavitation result from everyday use and operations.
  • Inadequate maintenance
  • Warlike or war operations as well as any kind of civil commotions
  • Wilful negligence and acts of the insured and its representatives
  • Defects or faults existing at the time of the start of the insurance that the company did not know

Indemnity Basis

For Total Loss – Some of the coverage will include the actual value of the item before the loss and the charges of installing and dismounting the machinery. The amount will be less than the deductible and any salvaged parts.

For Partial Loss – Newer parts are often replaced in damaged items, including artistry expenses, custom duties, and freight.

Premium Payments

  • Depending on the company where you have applied in Australia, the premiums should be made directly to the company or an approved intermediary within 60 days of the policy’s inception
  • Payments can be made via cheques, credit cards, and cash
  • Business owners should receive a receipt after the payment of the premiums
  • Call the company if they have not received the policy after a month has passed from the purchase date

It is essential to disclose any facts, previous damages, or scratches on the equipment that the insurers ought to know. If not, the entire insurance may be considered invalid.


If at a time of the damage or loss to the equipment, and you have any subsisting insurance that can cover the same, most of the companies may only be liable to contribute or pay its relatable portion of damages and losses. The deductible or excess is the amount you need to pay from your pocket every time you file a claim. See more about a deductible at this link:

Functions of the Company Inspector

When filing a claim, a company inspector will go on-site to assess the damages and the costs. Most of their work include the following:

1. Thorough Risk Assessment

Most inspectors are the “eyes” that report back to the company and see the actual risk. They take note of the condition of the equipment, maintenance, production flow, operator training, and exposure to business interruptions.

2. Prevention of Loss

The inspectors will inspect the equipment to try and detect any dangerous conditions before a problem occurs in the first place. They ensure that the equipment is well-suited to do the job, check the maintenance, review the logs, and test safety devices. There are many instances where the risk assessors have even prolonged the life of specific equipment.

3. Investigation of the Accident

If breakdowns happen, the inspector will determine the cause of the failure and the extent of the damage. They will assist the policyholders in taking immediate action if the claim is valid and to ensure that the company goes into its regular operations without any delays.

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