Understanding Coverage Limits: Customer All Risk (CAR) and Machinery Breakdown (MB) Insurance
Construction projects and machinery are significant investments. Protecting them requires specialized insurance. This blog post explores CAR and MB insurance, focusing on a key concept – USM damage caps.
CAR and MB Insurance: Protecting Your Assets
CAR insurance safeguards construction projects from physical damage during the building process. MB insurance shields machinery from breakdowns. Both offer a range of coverage options, but also have limitations.
USM Damage Caps: Limits in LEG Policies
The London Engineering Group (LEG) has established rules that might limit insurer liability in certain situations. USM (Unforeseeable and Sudden Mechanical Damage) damage caps are provisions within these LEG rules. They act as a:
- Limit on Coverage: Set a maximum amount the insurer will pay for sudden mechanical failures.
- Variation in Coverage: The specific cap amount can differ based on the policy and the insured property.
Important Considerations:
- USM Cap Applicability: These caps only apply to sudden and unforeseen mechanical issues, not wear and tear.
- Deductibles Still Apply: Even with USM claims, you might have a deductible – the initial amount you pay before the insurance kicks in.
Understanding these nuances is crucial. Carefully review your policy details and consult an insurance professional to ensure you have appropriate coverage and understand how USM damage caps might impact your specific situation.
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