Protecting Every Excavator, Crane and Bulldozer — At Work, At Rest, or in Transit — Construction· Infrastructure· Mining —
Contractor's Plant & Machinery Insurance (CPM), the insurer

the insurer's Contractor's Plant & Machinery (CPM) Insurance provides comprehensive protection for construction equipment against sudden and unforeseen physical damage — written on an "all risks" basis (all perils covered unless excluded).


"the insurer's Contractor's Plant & Machinery Insurance provides financial protection against damage to such items whether they are being used or are at work-site or at rest or during their maintenance operations."

What it covers:
→ Accidental external damage (operator error, impact, collapse, overturning)
→ Natural calamities (fire, flood, storm, cyclone, landslide)
→ Theft, burglary, riot, malicious damage
→ During maintenance, cleaning, overhauling
→ Inter-site transit
→ Optional Section 2: Third Party Liability (bodily injury/property damage to third parties)


"CPM policy is mainly designed to protect the interest of civil contractors owning Contractor's Plant & Machinery Policy."
→ Civil contractors (primary buyers)
→ Road and highway contractors
→ Mining companies
→ Equipment rental companies
→ Metro and railway contractors
→ Equipment financiers (banks/NBFCs)

What it does NOT cover:
Mechanical/electrical breakdown (MBD Insurance covers this), testing phase before commissioning (EAR covers this), on-road vehicle use (Motor Insurance covers this).

These four products form India's complete engineering equipment insurance ecosystem — each covers a different phase or type of risk:

EAR (Erection All Risk) — "Before the Machine Starts Working":
→ Phase: From first consignment unloaded at site to successful commissioning and testing
→ Trigger: Any sudden physical damage during erection and testing
→ Ends: When the machine is successfully commissioned and handed over
→ Best for: When you're installing NEW machinery/equipment at a project

CPM (Contractor's Plant & Machinery) — "While the Machine is Working":
→ Phase: After commissioning — the entire operational life of the machine on construction sites
→ Trigger: External/accidental damage (fire, flood, theft, collision, operator error)
→ Does NOT cover: Internal mechanical breakdown, before commissioning, public roads
→ Best for: Excavators, cranes, rollers, dumpers in daily operational use

Motor Insurance — "When the Machine Uses Public Roads":
→ Phase: Any time the vehicle uses a public road (MV Act mandatory)
→ Trigger: Road accidents, third-party road liability
→ CPM covers SITE operations; Motor covers PUBLIC ROAD operations
→ RTO-registered equipment exclusively on site = CPM special provision

Machinery Breakdown (MBD) — "When the Machine Breaks Down Internally":
→ Phase: Operational phase (same as CPM)
→ Trigger: Internal mechanical or electrical failure (engine seizure, hydraulic pump failure, electrical fault)
→ CPM specifically EXCLUDES mechanical/electrical breakdown
→ CPM + MBD together = complete operational coverage

Marine Cargo:
→ Covers equipment during transit from manufacturer to project site (before EAR begins)

"It is a requirement of this insurance that the sum insured be equal to the cost of replacement of the equipment by new equipment of the same kind and same capacity, which shall mean its replacement, or reinstatement cost, including freight, custom duties, if any, and erection costs."

SI Formula:
SI = Current New Replacement Value + Freight + Customs Duties + Erection Cost

Why new replacement value (not current market/book value)?
If your machine is destroyed, you need to BUY A NEW ONE — at current market prices, not what you paid 5 years ago. A JCB bought in 2020 for ₹60L might cost ₹85L to replace today. Insuring at ₹60L creates an under-insurance gap.

But — the Average Clause danger:
If you insure at ₹60L when replacement is ₹85L, and you suffer a partial loss of ₹20L:
Settlement = ₹20L × (60/85) = ₹14.1L — a ₹5.9L shortfall FROM YOUR OWN POCKET.
Always insure at FULL current replacement value.

Total loss settlement:
SI = Replacement value. Settlement = SI LESS depreciation (by age).
A 4-year-old excavator (40% depreciation): ₹85L SI → Settlement = ₹51L.
This is the "new-for-old SI but depreciated settlement" concept unique to CPM.

Review your SI every year:
Equipment replacement costs rise with inflation. SI should be reviewed and updated annually — especially for imported equipment where exchange rates affect replacement cost.

This depends on where the excavator operates:

If it uses public roads regularly → Motor Insurance is mandatory:
Under the Motor Vehicles Act, any vehicle registered with the RTO that uses public roads must have valid Motor Insurance. Standard CPM excludes "vehicles developed and licensed for regular on-road use."


"Equipments registered with RTO but working EXCLUSIVELY at any project site can also be covered under this policy."

This means:
→ If your excavator is RTO-registered but NEVER goes on public roads
→ It works only inside the mine, quarry, construction site, or industrial compound
→ It is physically impossible for it to use public roads (site is fenced, access-controlled)
→ THEN: CPM can cover it instead of motor insurance

Common examples:
→ Mine dump trucks operating inside a coal mine (never on public road)
→ Quarry excavators inside a gated quarry
→ Site dumpers inside a large construction compound

IMPORTANT:
If the equipment EVER uses public roads — even occasionally for maintenance trips — Motor Insurance is mandatory for those road movements. CPM covers only the site-based operations.

If you're unsure about your specific equipment's coverage status, call 022 4302 0000. Our team will determine whether CPM or Motor (or both) is appropriate for your equipment profile.

YES — theft and burglary are specifically covered under CPM, including when the machine is parked/at rest.

The "at rest" coverage is unique:
Motor insurance typically only covers vehicles being used. CPM specifically covers equipment "at rest" — parked on site overnight, on weekends, during breaks. This is when theft risk is highest.

Common theft scenarios covered:
→ Excavator parked on site overnight — theft of the entire machine
→ Generator stolen from site during weekend
→ Compressor lifted off site during night
→ Attachments and buckets stolen from excavators
→ Copper cables/components stripped from electrical equipment

Claim requirements for theft:
→ File FIR at nearest police station within 24 hours (mandatory)
→ If machine recovered damaged — claim for damage
→ If machine not recovered: wait for police to file "untraced" report (typically 60–90 days)
→ Policy may require: evidence of site security, locks, immobilization

What's NOT covered:
→ Theft committed by the insured's own employees (excluded)
→ Inventory losses (tools, accessories not specifically insured)
→ Theft of replaceable parts like drill bits, blades (excluded as consumables)

Prevention reduces premium:
GPS tracking, electronic immobilizers, site security guards — all reduce theft risk and may qualify for premium discounts. Inform the insurer of security measures at policy inception.

This is a Section 2 (Third Party Liability) scenario — but coverage depends on details:

If the crane was on SITE (within project boundary) and the vehicle was adjacent:
→ Section 2 (TPL) covers third-party property damage caused by insured machinery
→ The collapsed crane section that damaged the adjacent vehicle is a Section 2 claim
→ Legal liability + defence costs covered
→ ONLY if you have opted for Section 2 (it's optional, not automatic)

If the crane itself was on a PUBLIC ROAD:
→ Motor Insurance applies — not CPM
→ CPM doesn't cover vehicles on public roads

Section 2 simultaneously triggers Section 1:
The crane itself (Section 1 — Material Damage) is also damaged in the collapse. You would claim:
→ Section 1: For the crane's own repair/replacement
→ Section 2: For the third party vehicle damage
→ Both from the same CPM policy (if Section 2 was opted)

Key Section 2 exclusions to note:
→ Employee injuries NOT covered under Section 2 (Workmen's Compensation covers this)
→ Contractual liabilities beyond normal tort liability excluded
→ Accidents from road vehicles excluded

Section 2 limit:
Set at policy inception — must reflect the maximum realistic single-accident liability. For a crane near a busy road, a ₹1–5 crore per-accident TPL limit is appropriate. Call 022 4302 0000 to assess the right TPL limit for your operations.

This is the single most important clause in CPM Insurance — confirmed from the IRDAI-approved CPM policy wording (the insurer):

"This Policy shall apply to the insured items whether they are at work or at rest, or being dismantled for the purpose of cleaning or overhauling, or in the course of the aforesaid operations themselves, or when being shifted within the premises, or during subsequent re-erection, BUT IN ANY CASE ONLY AFTER SUCCESSFUL COMMISSIONING."

What this means:
CPM ONLY covers equipment that has been successfully commissioned — i.e., tested, handed over, and put into operational use. Equipment that is being erected, tested, or commissioned for the FIRST TIME is NOT covered by CPM.

Why this matters — the handover gap:
A new tower crane arrives at a construction site:
Phase 1 (Arriving, assembling, first test lift) → EAR Insurance covers this
Phase 2 (Handed over to site team, operating daily) → CPM Insurance covers this
THE GAP: If the tower crane collapses during its first test lift (Phase 1), EAR responds. If it collapses during its 50th lift (Phase 2), CPM responds.

For new equipment without EAR policy:
If you're bringing a brand-new excavator to site without an EAR policy, and it's damaged during its initial setup/commissioning — you have NO coverage. CPM doesn't apply yet (not commissioned), and EAR doesn't exist (no policy taken).

Practical implication:
Always ensure your equipment is covered by either EAR (during erection/commissioning) or CPM (after commissioning). Never leave equipment in the commissioning phase without insurance. Call 022 4302 0000 to ensure seamless EAR-to-CPM transition for your equipment.

YES — the insurer's CPM specifically covers inter-site transit. This is a confirmed advantage over many other CPM policies.


"During transit from one site to another" is listed as a covered peril under the insurer's CPM Insurance.

What this covers:
→ Equipment being transported by low-loader/trailer from Site A to Site B
→ Damage to equipment during loading onto transporter
→ Damage during road transit between sites
→ Damage during unloading at new site

What this does NOT cover:
→ Third-party road accidents involving the transporter (Motor Insurance covers this)
→ Transit by sea or air (Marine/Air Cargo Insurance covers this)
→ Transit to a location outside the policy schedule

Important caveat:
the insurer's CPM includes inter-site transit — but coverage is subject to conditions. The transit should be reasonable and expected (contractor moving equipment to their next project). Extended, long-distance, or unusual transit may require confirmation with the insurer.

Most other CPM insurers:
"No, inland transit is usually an exclusion. However, the policy can be extended to cover inland transit at terms to be agreed." — Sukoon Insurance FAQ. This confirms the insurer's CPM is MORE GENEROUS than the standard market position on inter-site transit.

If you're moving equipment internationally or by sea — you need a separate Marine Cargo policy regardless of CPM transit coverage.

YES — CPM covers both owned and hired-in equipment.

"Yes, the policy covers both owned and hired-in equipment. It's essential to declare all hired machinery details — such as type, value, and usage — accurately at the time of policy issuance to ensure adequate and uninterrupted coverage."

Why hired-in coverage matters:
Many contractors don't own all the equipment they use. A road contractor may own their rollers but hire excavators, concrete pumps, and cranes for specific projects. Under most hire agreements, the hirer is RESPONSIBLE for loss or damage to the equipment during their custody — even though they don't own it.

How hired-in coverage works:
→ Declare the hired equipment: type, make, model, replacement value, period of hire
→ SI based on the REPLACEMENT VALUE of the hired machine (not the hire charge)
→ If the hired equipment is damaged, CPM pays for repair/replacement
→ This protects you from claims by the equipment owner

Common hired-in equipment scenarios:
→ Hiring a tower crane for a specific building project (₹3–8 crore machine)
→ Hiring an excavator fleet for a highway project
→ Hiring a batching plant from a concrete company

Important note:
The equipment OWNER (rental company) may also have their own CPM covering the same machine. If both policies exist for the same equipment, there can be contribution/subrogation issues. Clarify with 022 4302 0000 at policy inception whether to cover owned-only, hired-only, or both, to avoid double-insurance complications.

By frequency, accidental damage and overturning are the most common CPM claims. By value, crane collapses and flood events dominate.

Most common CPM claims in India:

1. Excavator/Backhoe Accidents (highest frequency):
→ Overturning on uneven ground — especially on slopes and embankments
→ Boom/arm damage from overloading or collision
→ Buckets damaged by underground obstructions (utility cables, boulders)
Settlement: Partial loss — repair cost at JCB/Komatsu authorised service centre

2. Crane Collapses (highest value):
→ Tower crane collapse from strong winds or overloading
→ Mobile crane overturning during lifts
→ Crawler crane sinking into unstable ground
Settlement: Total loss or major partial — replacement value or major structural repair

3. Monsoon Flood Damage:
→ Concrete batching plants flooded
→ Generators submerged
→ Equipment parked in low-lying areas inundated
Settlement: Flood damage — cleaning, drying, component replacement — partial loss

4. Equipment Theft:
→ Generators and compressors stolen overnight
→ Entire excavators taken from unguarded sites
Settlement: Total loss (if not recovered) — SI less depreciation

5. Fire (from adjacent welding, fuel, electrical):
→ Fire spreading from welding operations to nearby parked equipment
→ Fuel-related fire in generator or concrete pump
Settlement: Total or major partial loss

How claims are settled:
Partial loss: Surveyor assesses → repair estimate approved → repairs completed → invoice paid (no depreciation)
Total loss: Surveyor declares CTL → depreciation computed → settlement = SI × (100% - depreciation %)