Posted on July 4, 2014
Most commercial property owners are well aware of the insurance requirements for the bricks and mortar of their properties. However, the requirement for engineering insurance is sometimes overlooked.
Damage to plant and machinery is covered on a property owners insurance policy if the damage is caused by an “insured peril” i.e. Fire, Flood, Malicious Damage etc. However, if Sudden and Unforeseen damage occurs to the plant in isolation – for example a massive failure in the lift mechanism, this would not be covered under the property policy as there is no damage to the actual building. This is where an engineering policy fills the gap.
However, insurance is only a part of the issue. In the regulatory environment in which we all now operate, there is a whole raft of legislation which applies to plant and machinery. Property owners and managers need to be familiar with all of this legislation as the penalties for failing to do so are severe. These can include prosecution, sanctions under the Corporate Manslaughter act as well as unlimited fines – not to mention the disruption to business and reputational damage.
The relevant legislation includes – but is not limited to – the regulations shown below.
the Electricity at Work Regulations 1989
the Provision and Use of Work Equipment Regulations 1998 (PUWER)
Lifting Operation and Lifting Equipment Regulations 1998 (LOLER)
Pressure Systems Safety Regulations 2000 (PSSR)
the Control of Substances Hazardous to Health Regulations 2002 (COSHH)
An Engineering Policy has the dual benefit of providing insurance cover as well as an inspection programme which ensures compliance with all the relevant legislation.
Engineering insurance is a necessary tool in the Risk Management armoury and Pii have access to the leading Engineering insurers who will be happy to provide advice as well as quotations if required.
If you need any further information on this topic, please contact Gemma Worton at [email protected].