Machinery (should) Breakdown?

In the world of insurance, we know Machinery Breakdown is a wording for the closure of industrial machines both during operation and in resting conditions.
Our insurance friends will immediately think of the MB policy when we mention the word "Machinery Breakdown". This policy aims to provide compensation for any damage to machines that are in operation or at the maintenance stage.

It should be understood that not all machine maintenance characteristics are the same. Each company will implement a maintenance pattern in accordance with the machine and the costs that will be incurred for its maintenance. Some engine components will be cared for in such a way so as not to break because they will require very expensive replacement, while some components are destined to be used up to their lifetime because replacing them will be cheaper than maintaining them.

As an introduction, let's go through some of the maintenance patterns that exist in the engineering world. Engineers recognize three types of maintenance on a machine, namely:

1. Preventive Maintenance 
A form of service where maintenance is carried out by predicting the time period in which the machine will not work efficiently. For example: the air conditioner will go under maintenance when it doesn't feel so cold

2. Periodic Maintenance
Is a form of service where maintenance is carried out based on the service life of the machine. For example: a motorbike will be maintained every 500 KM or 6 months.

3. Breakdown Maintenance
It is a form of maintenance where engine changes will only be carried out if there is damage.
These three forms of maintenance are generally carried out on production machines, but the choice of which form will be used will depend on the user, considering the economical price of the product.

Here’s an example of the ejector component in a power plant, an ejector is a component to absorb contaminants in the steam so that it does not harm the turbine. If maintenance is done for the ejector it will be very expensive compared to new purchases because in its maintenance it contains a turbine unloading cost which is much higher than the price of an ejector. Such conditions will certainly be detrimental, so management will of course implement breakdown maintenance where the ejector will only be replaced if there is damage.

A simple example like this can be an important consideration of an underwriter in closing a Machinery Breakdown policy. The most important thing in extending machine life is the maintenance pattern so of course the underwriter must know the maintenance pattern of each tool in the production line. With this understanding, of course we agree that Breakdown Maintenance is the biggest enemy in closing a Machinery Breakdown insurance policy.

By viewing these conditions, the underwriters should be able to recognize the machines and their maintenance patterns. The underwriting pattern for a Machinery Breakdown policy closure should be “per machine analysis” not “per line analysis” or even “per plant analysis”. With per machine analysis, the underwriter will know more about the characteristics of each machine and make a prudent decision.

There goes a little introduction to the maintenance of machines, hopefully it can provide an overview for all my friends in the midst of the ongoing closure of machinery breakdowns in the insurance market today.