Machinery Inherent Defects Insurance
Equipment breakdown insurance for mechanical and electrical services installed in newly-constructed and refurbished buildings
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Modern buildings are becoming increasingly complex, with up to 40% of construction costs relating to the mechanical and electrical services that support them.
These services can be plagued by defects caused by poor design, materials or workmanship, and this can be highly problematic for the owners and occupiers of affected buildings.
A traditional remedy has been the provision of collateral warranties by contractors. But with insolvencies in the construction and real estate sectors running at over 3,600 a year(1) in England and Wales, and 18% of all corporate insolvencies in Ireland(2), these cannot always be relied upon and can be very difficult and costly to enforce.
Increasingly, developers, owners, funders, and occupiers are turning to the security and reliability of inherent defects insurances.
Our response
HSB Machinery Inherent Defects Insurance
As a leading specialist provider of engineering and technology insurance, our product has been developed to provide comprehensive cover for the mechanical and electrical services installed in buildings
Commercial | Residential (blocks) | Data centres | Warehouses | District heating installations and energy centres
Available for periods of up to 12 years(3), our policy covers actual or impending damage caused by an inherent defect in insured property that existed prior to practical completion of the building.
Installed services covered by our product include:
- Boilers, space heating, ventilation and air conditioning systems
- Lifts and escalators
- Building maintenance units
- Electrical distribution systems
- Equipment used for building security and environmental control
- Electrical and mechanical parts of water pumping, pressurisation and distribution systems
Additional cover is also available for the loss of rental income suffered as a result of a defect.
Technical audit
All projects insured on our policy are the subject of a technical audit during construction of the building, carried out by our highly-experienced engineers.
Designs and specifications are audited, and inspections take place throughout the installation period to ensure that quality is maintained.
Why buy Machinery Inherent Defects Insurance from HSB?
Our underwriters and engineers have extensive experience in providing covers for plant and equipment in a vast array of applications and are recognised as experts in this field. Drawing on our considerable engineering expertise, we are able to provide tailored insurance products to meet the needs of developers, owners, funders and occupiers of new commercial buildings:
- Policy wordings specifically designed for mechanical and electrical services in new buildings
- Wordings designed with all interested parties in mind
- Loss of rent cover available on all policies
- Extensive expertise in building services technology
- Access to experienced mechanical and electrical engineers
- Access to specialist claims handlers and loss adjusters
HSB Group
Munich Re
A.M. Best Company
Customer Service
Trading options
HSB is committed to providing a superior customer experience through our specialist claims service
Claims examples
Lift breakdown
Replacement of defective drive motors
Transformer failure
Replacement of both transformers
Loss of rental income
