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Learn how Contractors’ Plant and Machinery Insurance protects excavators, cranes, graders, bulldozers, concrete mixers and other construction equipment in Kenya. Compare cover, exclusions and quotations.
Construction plant and machinery represent a major financial investment for contractors, property developers, equipment-hire businesses and infrastructure companies.
An excavator, crane, grader, bulldozer or concrete pump can cost millions of shillings. Yet the equipment may operate under difficult conditions involving:
When a critical machine is damaged, the contractor may face more than a repair bill. The project may slow down, contractual deadlines may be missed and replacement equipment may have to be hired at short notice.
Contractors’ Plant and Machinery Insurance, commonly abbreviated as CPM Insurance, is designed to protect eligible construction plant and equipment against sudden and unforeseen physical loss or damage while operating, resting or being dismantled for maintenance, subject to the selected insurer’s policy terms.
Kenyan insurers generally place Contractors’ Plant and Machinery within the engineering-insurance category. Britam, for example, lists Contractors’ Plant and Machinery among its engineering covers, while CIC’s Contractors All Risks product separately recognises construction plant, equipment and machinery as project exposures.
Your equipment earns income only when it is working. CPM Insurance helps protect the machinery on which your contracts, employees and project timelines depend.
Contractors’ Plant and Machinery Insurance is an engineering policy covering specified mobile or stationary construction equipment against accidental physical loss or damage from insured causes.
Depending on the policy, protection may apply while the machinery is:
The policy is generally arranged on an all-risks basis, meaning it covers sudden and accidental physical loss or damage unless the cause is specifically excluded.
“All risks” does not mean every possible event is insured. Wear and tear, mechanical breakdown, poor maintenance and other exclusions may still apply.
Kenya’s Occupational Safety and Health Act defines plant broadly to include equipment, gear, machinery, apparatus or appliances and their components. It defines machinery as articles assembled or connected to convert, transmit, control or use energy to perform work.
For insurance purposes, Contractors’ Plant and Machinery may include equipment such as:
The insurer must receive a complete schedule showing each item’s:
Equipment omitted from the schedule may not be covered.
CPM Insurance may be suitable for:
The National Construction Authority Act describes contracting broadly to include construction, installation, erection, alteration and related work involving the supply or control of materials and labour. Contractors working in these areas may own, lease or hire costly machinery that requires dedicated protection.
Coverage differs between insurers, but a Contractors’ Plant and Machinery policy may protect against the following risks.
The machinery may collide with:
Damage to the insured equipment may be covered, while damage to other people’s property may require an appropriate third-party liability section.
Excavators, cranes, loaders and graders can overturn because of:
Overturning can cause extensive structural and hydraulic damage.
The policy may cover sudden physical damage caused by fire or explosion, subject to the policy wording.
Possible sources include:
Construction equipment may be exposed to:
Flood protection may be subject to additional excesses or risk conditions, particularly where machinery operates near rivers, low-lying areas or excavations.
Theft protection may apply where machinery or insured components are stolen under circumstances covered by the policy.
Insurers may require:
Theft of easily removable parts may be restricted unless specifically included.
The policy may cover deliberate physical damage caused by third parties, subject to exclusions and any political-violence requirements.
Plant may be damaged by:
Other sudden and unforeseen events may be covered where they are not specifically excluded.
The policy is primarily concerned with physical damage to the insured plant, not every financial consequence arising after the machine stops working.
Not automatically.
Contractors’ Plant and Machinery Insurance generally focuses on accidental external physical damage. Internal mechanical or electrical breakdown may be excluded or require a separate Machinery Breakdown Insurance policy.
Examples of mechanical or electrical breakdown include:
Britam distinguishes Contractors’ Plant and Machinery from other engineering policies, illustrating why CPM and Machinery Breakdown should not be treated as identical products.
A contractor should ask:
These policies are related but protect different exposures.
Contractors All Risks, or CAR Insurance, primarily protects:
CIC states that its Contractors All Risks cover can include contract works, construction plant, equipment and machinery.
CPM focuses specifically on the contractor’s machinery and equipment.
It may be arranged:
Consider a contractor building a bridge.
The contractor may require:
One policy should not be assumed to replace all the others.
Some construction machinery can travel on public roads, but CPM Insurance does not automatically satisfy compulsory motor-insurance requirements.
Commercial Motor Insurance may be required where equipment is:
Examples may include:
The contractor should confirm whether the machine requires:
A standard CPM policy may not automatically protect machinery while being transported between sites.
A separate Inland Transit, Goods in Transit, Marine Cargo or plant-transit extension may be needed when equipment is:
The contractor should confirm when cover begins and ends.
Important questions include:
Do not assume the transporter will compensate the full equipment value.
Construction businesses often use equipment hired from third parties.
The hire agreement may make the contractor responsible for:
A CPM policy can sometimes be extended to include hired-in plant, subject to:
The contractor should review the hire agreement before accepting the equipment.
Particular attention should be paid to clauses requiring payment of continuing hire charges while the machine is under repair. These charges may not be covered by ordinary CPM Insurance unless specifically insured.
Equipment owners may hire machinery to contractors.
An equipment-hire business should consider:
The policy should permit the declared hire activity.
A policy arranged for the owner’s own use may not automatically cover commercial hiring to third parties.
Common exclusions may include:
Exact exclusions differ between insurers.
This distinction is important during claims.
Wear and tear develops gradually through normal use.
Examples include:
These costs are generally the owner’s maintenance responsibility.
Accidental damage results from a sudden and unforeseen event.
Examples include:
Where worn parts contribute to an accident, the insurer may exclude the defective component while considering resulting accidental damage to other insured parts, depending on the policy.
Equipment should generally be insured at its current replacement value, including relevant costs such as:
Using only the machine’s depreciated accounting value may create underinsurance.
For example, a contractor may have purchased an excavator several years ago for KSh 10 million. Replacing it today may cost KSh 17 million due to:
If the contractor insures it for only KSh 10 million, an average or underinsurance condition may reduce a partial claim.
The sum insured is the value declared for each item of plant or machinery.
The equipment schedule should contain accurate:
A blanket sum without a reliable equipment schedule may create uncertainty during a claim.
The schedule should be updated when machinery is:
An excess is the portion of an approved claim that the insured must meet.
CPM excesses may be:
For example:
This simplified example remains subject to policy terms and any other deductions.
A low premium combined with a very high excess may create cash-flow difficulty during a claim.
Not always.
A standard CPM policy primarily protects the insured equipment.
If an excavator damages a neighbouring building or a crane injures a third party, the contractor may require:
The contractor should review potential limits for:
No—not automatically.
CPM Insurance covers physical damage to the insured machinery. Injury to the operator should be addressed through appropriate people-protection policies, such as:
Kenya’s Occupational Safety and Health Act requires occupiers to provide and maintain plant, work systems and procedures that are safe and without risks to health, along with adequate information, training and supervision. Insurance does not replace these obligations. (Kenya Law)
CPM Insurance is not automatically compulsory for every machine or every contractor.
However, it may be required by:
Where equipment is financed, the financier may require its interest to be noted in the policy.
Where equipment operates on public roads, separate statutory Motor Insurance requirements may also apply.
Contractors should review each contract and financing agreement carefully.
There is no universal premium.
The cost depends on:
A crane operating at a high-rise site may present a different risk from a generator operating inside a secured compound.
Similarly, an excavator working in a quarry or near a river may attract different terms from one used on a controlled building site.
Prepare the following information:
Accurate information allows insurers to quote the real exposure.
Depending on availability, a contractor may consider the following extensions.
This may protect machinery against specified damage arising from political violence, riots, strikes or terrorism.
After a serious accident, the contractor may need parts urgently.
This extension may cover additional eligible costs associated with:
Where parts must be imported quickly, an airfreight extension may cover the additional cost, subject to a sublimit.
Heavy damaged machinery may require cranes, recovery vehicles or specialist contractors to remove debris.
An escalation provision can help account for changes in replacement costs during the policy period.
Protects declared equipment hired from other owners.
This may help with eligible financial loss when hired-out equipment cannot earn income—or when the contractor remains responsible for hire charges—following insured damage.
This is not normally part of standard physical-damage cover and must be specifically arranged.
Protects machinery while moving between declared locations, subject to the agreed mode of transport.
May cover property belonging to or under the control of the insured that is damaged during an insured event, subject to policy terms.
Where plant is financed by a bank, SACCO, leasing company or asset-finance provider, the financier may require:
The contractor should not cancel or materially change the policy without considering the financing agreement.
After a major loss, the financier may have priority over settlement proceeds, depending on the policy endorsement and loan terms.
The contractor should:
Continuing to operate damaged machinery can worsen the loss and affect the claim.
The insurer may request:
The insurer may appoint:
After theft, the insured should:
The insurer may examine whether the declared security warranties were followed.
Where the equipment can be repaired, the insurer may pay eligible costs such as:
Deductions may apply for:
A machine may be treated as a total loss where:
Settlement may consider:
The sum printed on the schedule is not automatically the amount payable in every total-loss claim.
Accounting values may be far lower than current replacement costs.
Plant may need to be separately listed or covered under a dedicated CPM policy.
Transit may require an extension.
Hired-out equipment creates a different risk from machinery used only by the owner.
The insurer may need evidence that damage resulted from an accident rather than neglect.
This increases accident exposure and may breach policy conditions.
This can turn a manageable repair into a major loss.
Machines should not be left overnight in riverbeds, excavations or flood-prone areas without appropriate controls.
Buckets, attachments, drilling heads, booms and other accessories should be declared where their values are significant.
The transporter’s liability may be limited or excluded.
The lowest premium may have:
Maintain servicing based on manufacturer recommendations.
Operators should inspect:
Operators should receive suitable training and authorisation.
Assess:
Use:
Cranes and lifting equipment should operate under appropriate load assessments and safety controls.
Near misses can reveal problems before a major accident occurs.
The Occupational Safety and Health framework places duties on occupiers and users regarding safe plant, maintenance, supervision and risk controls. (Kenya Law)
Ensure each insurer receives the same equipment schedule and operating information.
Compare:
A professional comparison should explain what each quotation does not cover—not merely the quoted price.
Imana Insurance Agency Kenya Ltd helps contractors, developers, equipment owners and plant-hire companies compare Contractors’ Plant and Machinery Insurance quotations from suitable licensed insurers.
The process can include:
Imana can also assist with related construction insurance, including:
The Insurance Regulatory Authority regulates and supervises Kenya’s insurance industry and provides a registry through which customers can verify licensed entities. (ira.go.ke)
Imana Insurance Agency Kenya Ltd
4th Floor, Krishna Centre
Woodvale Grove, Westlands
Nairobi, Kenya
Imana serves contractors and equipment owners in:
Website: www.imana.co.ke
Call or WhatsApp: +254 796 209 402
Compare quotations. Understand the equipment risks. Choose suitable cover. Let Imana handle the rest.
It is engineering insurance covering specified construction equipment against sudden and unforeseen physical loss or damage from insured causes.
Excavators, cranes, bulldozers, graders, loaders, rollers, concrete equipment, generators and other construction machinery may be insured, subject to the insurer’s acceptance.
It is not automatically compulsory for every contractor, but project contracts, financiers, hire agreements and tender conditions may require it.
Not necessarily. Internal mechanical or electrical breakdown may require a separate Machinery Breakdown policy or extension.
Theft may be covered subject to security conditions, evidence and the policy wording.
Only where transit is included or separately extended. Standard site cover should not be assumed to apply while the machine is being transported.
Not automatically. A Public Liability, CAR liability, Motor or Employer’s Liability policy may be required.
No. Operator injuries should be addressed through WIBA, Group Personal Accident, medical or other suitable protection.
Yes, hired-in plant can sometimes be included subject to the insurer’s approval and the hire agreement.
Loss-of-hire protection may be available as a specific extension or separate policy. It is not automatically included in ordinary CPM physical-damage cover.
It should generally be declared at current replacement value, including applicable freight, taxes and installation costs.
Possibly. Every location, activity and machine must be declared and accepted within the policy’s territorial limits.
Yes. Imana can help compare premiums, equipment values, excesses, transit terms, theft conditions, extensions and exclusions.
Construction machinery is expensive, mobile and exposed to difficult operating conditions.
A single overturning, collision, flood, theft or fire can affect:
Contractors’ Plant and Machinery Insurance helps protect eligible physical damage to the machinery, but the policy must be structured correctly.
Before purchasing cover:
Your machinery does the heavy work. Give it protection designed for the risks it faces.
Imana Insurance Agency Kenya Ltd
Website: www.imana.co.ke
Call or WhatsApp: +254 796 209 402
Contractors’ Plant and Machinery premiums, covered events, excesses, extensions, territorial limits and exclusions differ between insurers. This article provides general information and does not replace a current quotation, policy schedule or complete policy wording.