Machinery Breakdown and Boiler/Pressure Vessel Insurance
Machinery Breakdown (MB) and Boiler/Pressure Vessel policies cover operating risks rather than construction risks. IC-88 expects you to separate sudden accidental breakdown from gradual deterioration and maintenance-related failure.
Core rules
- MB covers sudden and accidental mechanical or electrical breakdown of insured machinery while in operation, subject to exclusions and deductibles.
- MB does not cover wear and tear, gradual deterioration, corrosion, faulty maintenance, overload or tests unless specifically agreed.
- Boiler/pressure vessel cover responds to explosion or collapse of insured pressure equipment, often including damage to surrounding property and third-party liability, subject to limits.
- Statutory inspection and competent-authority compliance are central to boiler underwriting.
- Business interruption following MB or boiler explosion is a separate extension; it is not automatic.
Worked example
A factory motor burns out because of a sudden short circuit. MB can respond to the rewinding/replacement cost less the deductible, provided the cause is accidental breakdown and not gradual insulation failure or overload. If the same motor failed because of long-term overheating from poor maintenance, the claim is likely excluded.
Traps
Do not treat MB as a maintenance contract. Do not pay for gradual wear merely because the final event was sudden. Do not assume boiler explosion cover includes all pressure-vessel defects. Do not forget the BI extension and its waiting period.