MBD CLAIMS

At Q.A. Shirazi Surveyors, we specialize in the investigation, assessment, and adjustment of Machinery Breakdown (MBD) claims across a wide range of industrial sectors. Our team comprises qualified mechanical, electrical, and production engineers who bring years of hands-on experience in evaluating industrial equipment and heavy machinery failures.

Since our establishment in 2015, we have successfully managed numerous MBD claims involving power generation units, compressors, turbines, textile machinery, packaging lines, HVAC systems, injection molding machines, CNC equipment, and process-control systems.

We approach every assignment with the objective of identifying not only the extent of loss but also the root cause of failure—be it operational error, material fatigue, manufacturing defect, electrical fault, or inadequate maintenance.
Our reports are recognized for their technical accuracy, factual evidence, and balanced recommendations, helping insurers and insureds achieve fair and prompt claim resolution.

A Machinery Breakdown (MBD) claim arises when an insured mechanical or electrical machine suffers accidental, sudden, and unforeseen physical damage that requires repair or replacement. Unlike normal wear and tear, MBD losses are typically abrupt events that cause operational downtime and financial loss.

Such incidents often occur in high-value industrial installations where machinery operates continuously under pressure, temperature, or vibration stresses. Effective handling of MBD claims requires both technical expertise and a clear understanding of policy intent.

Common Causes of Machinery Breakdown

  • Mechanical fatigue, over-speeding, or imbalance of rotating parts.

  • Electrical short circuits, insulation failure, or motor burnouts.

  • Lubrication failure, bearing seizure, or shaft misalignment.

  • Human error or operational negligence.

  • Foreign-object damage or manufacturing defects.

  • Overheating, vibration, or inadequate cooling.

  • Hydraulic or pneumatic system failure.

Typical Equipment Covered

  • Generators, transformers, switchgear, and motors.

  • Boilers, compressors, pumps, turbines, and engines.

  • Textile and plastic-processing machinery.

  • Food-processing and packaging lines.

  • HVAC and refrigeration plants.

  • Elevators, cranes, and conveyor systems.

Our survey process involves on-site inspection, detailed dismantling examination, and component-level analysis in coordination with maintenance teams, OEM engineers, and repair vendors.
Where necessary, we perform root-cause investigations and failure-mode analysis to determine whether the damage qualifies under the MBD policy terms and to prevent future recurrence.

The Machinery Breakdown Policy provides indemnity for sudden and unforeseen physical damage to insured machinery while in operation, at rest, or during maintenance and testing, resulting in repair or replacement costs.

1. Scope of Coverage

  • Accidental mechanical or electrical breakdown of insured equipment.

  • Damage due to tearing apart, centrifugal force, or short circuiting.

  • Costs of repair or replacement of affected parts and associated labor.

  • Dismantling, freight, and re-erection expenses necessary for repair.

  • Reasonable costs of temporary repairs to resume operations.

2. Exclusions

  • Gradual deterioration, wear and tear, corrosion, or erosion.

  • Damage due to negligence or failure to maintain the equipment.

  • Fire, explosion, or other perils covered under Fire policies.

  • Consequential losses such as production interruption (covered under MLOP if purchased).

  • Manufacturing defects known at inception.

  • Losses during experimental or test runs exceeding rated capacity.

3. Basis of Indemnity

  • Repairable losses: actual cost of parts, materials, and labor to restore machinery to working condition.

  • Total loss: replacement cost less depreciation or salvage value.

  • Sum insured: declared replacement cost of the machine, including customs duty, freight, and installation.

  • Deductibles: standard policy excess as per schedule.

4. Related Extensions

  • Machinery Loss of Profit (MLOP) – covers loss of gross profit arising from business interruption following a breakdown.

  • Dismantling and Re-erection Cover – for large plant requiring specialized installation.

  • Third-Party Liability Extensions – for damages caused to surrounding property or personnel.