We have heard many times that if an important machine has a maintenance contract, it no longer needs to be insured for Machinery Breakdown. The foregoing is a gross error since a maintenance contract will never cover claims due to negligence of personnel (which is one of the main causes of claims). Nor will it be responsible for the consequential losses caused by a production stoppage as a result of a breakdown.
These two very important cases can be covered with a Machinery Breakdown policy and its corresponding coverage of consequential losses due to Machinery Breakdown.
That is why Maintenance contracts and Machinery Breakdown policies are complementary and never substitute for one another. Of course, it should be borne in mind that a good maintenance contract can and should reduce the premium for the Machinery Breakdown policy.