Electronic Equipment Insurance and Contractor’s Plant and Machinery
Electronic Equipment Insurance (EEI) and Contractor’s Plant and Machinery (CPM) cover movable or specialised equipment. IC-88 tests their scope because candidates often confuse them with CAR, MB or office contents policies.
Core rules
- EEI covers accidental physical damage to electronic equipment from perils such as fire, theft, electrical surge and accidental damage; it typically excludes wear, gradual deterioration, data/software loss and maintenance faults.
- CPM covers contractor’s plant and machinery at site or during transit/storage if endorsed; it is usually an all-risks material-damage cover, not a third-party liability cover.
- Sum insured should reflect replacement/market value as required; deductibles apply per loss.
- CPM is not automatically included in CAR; it must be separately insured.
- EEI may cover hired-in equipment only if the policy wording and interest permit it.
Worked example
An excavator insured under CPM overturns on site and damages its boom. CPM responds to the repair cost less the deductible because overturning is an accidental physical loss. If the excavator had been left uninsured under CPM and the contractor assumed CAR would pay, there would be no indemnity because CAR does not automatically cover contractor’s plant.
Traps
Do not use CAR to pay for contractor’s plant. Do not assume EEI pays for lost data or software. Do not treat CPM as liability cover. Do not ignore hired-in plant and transit/storage extensions.