In the first blog we have explored the floater cover. We have seen that the floater cover is a comfort factor for a person involved in multi-location contract work. However, we still need to address the issue of a policy cover during movement between the locations. We also need to look at a suitable cover for dismantling of say a hot mix plant, before it can be moved.
Dismantling: The policy coverage under a CPM policy is for:… 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…
Thus, it is apparent that dismantling for purposes of proposed shifting to another location & re-erection after that, is not a part of basic cover in the policy. However, the rules provide for this cover as an additional benefit on payment of necessary premium.
Transit risk: CPM policy norms provide an inbuilt cover under the policy for shifting of items of Contractor’s Plant, Machinery and Equipment from one point of the project site to another point in the same project site. However movement from one location to another location should be specifically covered under a transit policy.
An interesting case in this regard is that of New India Assurance Company, vs 1. M/S Action Bridge Gap before the State Consumer Disputes Redressal Commission, Chandigarh.
It involved coverage for 38 machineries/construction equipment of various types, including self moveable and non-self moveable, insured under a CPM policy with Floater and Transit Cover from between one project site location to another (within 150 Kms). The Project Locations were: (1) 32 Km Milestone Punahana Nagina Road, Hodal (2) Rampura Chowk, Delhi, Jaipur Highway, Sec 82, GGN (3) Okhla PH 1 & II, N.Delhi (Future locations to be intimated by insured).
Dispute was regarding settlement of claims for dumpers which collided with each other due to heavy fog while in transit between one location to another. The decision of the Insurer to not accept the claim was based on the fact that the claims occurred beyond the project site. The District Forum and the State Forum rejected this stand since the policy itself specifically mentioned transit coverage between specified locations.
The Check point:
Check your requirement of movement of machinery between different locations
Also check if machinery to be moved is non- mobile one (like batching plant)
If the answer is yes, buy specific cover as desired.
