• Insurance damage against CPM policy

Our company owes a JCB machine (excavator) and was working at site, one evening it met with an accident wherein it caused death for a person. 

Few days later compensation case was filed by the dependents of the deceased and then under-mentioned was learnt by us:

1) Insurance was valid with Bajaj Insurance
2) Insurance was CPM policy and not motor policy with 10% third party liability (maximum) 
3) JCB was registered with having registration number issued from Motor Vehicle department.

the deceased was government employee and compensation is around 44 lacs and insurance company has filed reply stating their liability is minimum.

We seek recourse as to how we can make insurance company liable

Please suggest suitable remedy
Asked 1 month ago in Civil Law from Kolkata, West Bengal
CPM insurance is an All Risk policy covering the plant and machinery of a contractor at specified work sites.

2)The CPM Policy  will assist in protecting you against the sudden and unforeseen physical loss or damage to your plant and machinery. It covers all kinds of construction equipment like compressors, heavy duty cranes, boring machines, bulldozers, pipe jacking, and hauling equipment, excavators, loaders, road rollers

3) the policy can be extended to cover loss or damage to proposer's surrounding property, third-party liability, clearance and removal of debris, etc., on payment of additional premium.

4) in your case if third party liability is fixed at maximum 10 per cent insurance company cannot be made liable to pay Rs 44 lakhs 
Ajay Sethi
Advocate, Mumbai
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it is necessary to peruse the insurance policy to advise 

2) without going through the policy we cannot advise you how to make the insurance company liable 
Ajay Sethi
Advocate, Mumbai
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1.CPM stands for  contractors part and machinery . CPM insurance is an All Risk policy covering the plant and machinery of a contractor at specified work sites.

2. Under the above policy, you can not make the said Insurance company liable to pay the compensation.
Krishna Kishore Ganguly
Advocate, Kolkata
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1. Do not have the apprehension that based on the above CMP policy, the Insurance company can be held liable to pay any amount towards the compensation.

2. The appropriate policy covering the accident at the site was required to be taken by you.

Krishna Kishore Ganguly
Advocate, Kolkata
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Hi 
CPM Policy is Contractor's Part and Machinery policy.

Motor vehicles insurance policy is a different policy altogether. 

However in Bajaj Allianz General Insurance v Ram Avtar case,  the Delhi high court has said that it is not necessary to have paid additional premium for 3rd party liability when CPM policy is existent. 

In the said judgment the Delhi High court has clearly stated that having CPM is good enough insurance cover as it includes 3rd party liability also. 

In a case similar to yours more specifically in case of  Bajaj Allianz General Insurance ... vs Ram Avtar Yadav & Ors. on 1 May, 2013 @ Delhi High Court, the Delhi High court has categorically stated as follows:

a)  Excavator which is covered under Rule 2(ca) of the Central Motor Vehicles Rules, 1989, is reproduced as under:-

2(ca) "construction equipment vehicle" means rubber tyred (including pneumatic tyred), rubber padded or steel drum wheel mounted, self-propelled, excavator, loader, backhoe, compactor roller, dumper, motor grader, mobile crane, dozer, fork lift truck, self-loading concrete mixer or any other construction equipment vehicle or combination thereof designed for off-highway operations in mining, industrial undertaking, irrigation and general construction but modified and manufactured with "on or off" or "on and off" highway capabilities."

2b) In the present case, there was an insurance between the appellant and owner of the vehicle/respondent No.6 as per policy No.0G-10- 1101-0410-00000027 and amount of Rs.27,893/- was paid towards the premium. Though no additional amount has been paid in the instant case towards the third party liability, however, since the vehicle is covered under the Motor Vehicle Rules as a motor vehicle, the claimant / injured cannot be denied compensation under Section 140 of the Motor Vehicles Act, 1988.

Hence in your case, the liabilities arising out of the accident is covered under Motor vehicle rules as a Motor vehicle, CPM policy covers the claims arising out of the accident.

Hope this information is useful.
Rajgopalan Sripathi
Advocate, Hyderabad
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CPM stands for  contractors part and machinery . CPM insurance is an All Risk policy covering the plant and machinery of a contractor at specified work sites. The contractor’s machinery is generally used under rough conditions and so is more vulnerable to damage. Breakdown of such machinery can jeopardize the completion of a project and put many other things at stake. The CPM Policy is designed for all such situations and will assist in protecting you against the sudden and unforeseen physical loss or damage to your plant and machinery. It covers all kinds of construction equipment like compressors, heavy duty cranes, boring machines, bulldozers, pipe jacking, and hauling equipment, excavators, loaders, road rollers etc.

Cover can be extended to includes up to a limit chosen by you on the following on payment of additional premium-
Third party liability






We seek recourse as to how we can make insurance company liable

Thus, if the insurance claim on such aspects is restricted to that extent only under CPM policies, then any claim beyond that extent may not be maintainable. 
T Kalaiselvan
Advocate, Vellore
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Our company had considered having necessary insurance coverage, however, we were unable to make out the difference between CPM & motor vehicle policy.

The explanation about CPM policy was given in my previous post.
The limited coverage on third party insurance only shall be payable by the Insurance company.






T Kalaiselvan
Advocate, Vellore
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127 Consultations
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We need suggestion as to how the liability of the claims can be transferred to insurance company as to our notice we have registration under motor vehicle as well which was within the validity of the insurance. 

Registration of a vehicle is different to that of the vehicle insurance and the type of policy you had chosen. 
Now you have nothing to do except to challenge the claim case on the basis of merits in yor side attributing the cause of accident due to the fault of the deceased.
T Kalaiselvan
Advocate, Vellore
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127 Consultations
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