During the erection and installation of machinery, the dangers involved are high which can result in huge losses and damage to property. The risks can cause huge financial losses to the contractor. The policy offers cover at several stages of an engineering project, like Storage, Testing, Handling, and Commissioning at a plant or engineering site. So, How can you minimize the premium for Engineering All Risk Insurance?
The premium for Engineering All Risk Insurance depends upon the kind of project, time of the project, excess options, and the sum insured. Therefore, the premium can be reduced by adopting steps and processes that reduce the risks of accidents in your projects. The lower the risk, the lower your premium will be.
Many steps can be taken to do the same:
- Select only the relevant covers
- Hire Professionals to manage your activity
- Maintain a schedule for checks and balances for machinery and equipment
- Get a contingency process in place
- Use fire extinguishers and other firefighting equipment
- Train the staff for maintaining and upkeep of the equipment and material
Case on Engineering All Risk Insurance Premium
Susan Rawat runs a medium-sized fashion clothing manufacturing business and has employed about 55 permanent employees, who look after much of the modern machinery running in the factory.
The machine handling requires training of about 15 days for all user functions and about 30 days for maintenance. However, she maintained an engineering (machinery all-risk) all-risk insurance policy for her plant for the past three years. Thus, her premiums have been increasing at a steady rate as she installed more machines.
This year, she decided to install an automated system to monitor machine breakdown and minimize the downtime for each. Therefore, informed the insurer about it. Therefore, this one installation will cost the company about Rs. 15 Lakh in total one-time cost, and the saving expectation is approximately 3 lakhs each year in maintenance and downtime losses.
So, the insurer after examining the estimates has reduced the premium payable by Susan’s firm by 15%.