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This article briefly covers the concept of machinery insurance, and how an incident can be assessed.
Machinery insurance
For a claim to be covered by machinery insurance, it is necessary that the incident should be both sudden and unforeseen. This means that both requirements have to be met.
The word sudden means among other things that there was no possibility of preventing the incident. It must not have been initiated slowly and gradually, but must have happened instantaneously. The requirement that the incident should be unforeseen specifically excludes the wear and tear to which every product is exposed during use. For a claim to be accepted, it must involve an element of surprise. It should not have been predictable for management or experienced staff that such an incident could occur in the given situation. In their wording, these policies exclude claims that arise through normal wear or consumption.
An accident
The case involved a horizontal boring and milling machine used for machining large workpieces. It had suspended weights that counterbalanced the headstock and could be set at various working heights. The suspension consisted of two parallel cables fixed to the six-ton counterweight. The cables ran over two pulleys mounted on top of the six-metre high machine.
On this occasion, the operator heard a snapping sound from the machine and found that the counterweight cables had begun to give. The machine was stopped immediately and a repairer was called in. When the repairer arrived, it was decided that the cables had to be replaced immediately. To
facilitate this, the counterweight had to be moved slightly in the vertical direction in order to secure it. As soon as this was started, both cables broke and the counterweight fell 4 m and caused major damage to the machine frame.
Picture of machine
Assessment of damage
An external damage investigation concluded that the cause of cable breakage was bending fatigue and wear. Around 90% of the 265 strands had broken before the cable gave way. It also seemed reasonable that particularly exposed parts of the cable must have shown individual broken strands for several months prior to the incident.
Cable showing a large number of broken strands.
The claim was rejected by If on the grounds that the incident was not unforeseen. The machine instruction manual stated specifically that the counterweight cables should undergo a thorough inspection not less than once every six months, which had been neglected. In addition, the company in question had its own internal requirement for a daily inspection of the cables.
This assessment of the incident was not accepted by the insured party who took the matter further. It then went on to be tested in the district court, the court of appeal, and the high court, all of which came to the same conclusion as If. The point emphasised by the courts was that a responsible management that routinely carried out the necessary inspections should have found it possible to detect the broken strands long before total failure occurred, and that the incident was therefore foreseeable.
Points to remember:
- For machinery insurance to apply, regular servicing must be carried out.
- Maintenance instructions or regulations from the machine supplier must have been followed for a claim to be regarded as unforeseen. Minor deviations from them may result in reductions in compensation, and in the worst case no compensation may be paid at all.
- Wear and fatigue indicate that an incident is not unforeseen. Certainly, it is required that the insured should have been able to detect the imminent damage.
- An objective assessment of the damage must be carried out. It is not always the insured’s opinion that the damage was unforeseen that is decisive. It is the responsibility of the machine user to undertake the relevant measures to avoid claims.
