# Machinery breakdown insurance in Germany: the cover your property policy leaves out > German business property insurance pays for fire, storm, burst pipes and burglary, not for a machine that breaks down on its own. Maschinenversicherung covers sudden and unforeseen damage to machines and plant, whatever the cause, unless it is excluded. If you run production, construction equipment or technical plant in Germany, this is usually the policy that decides whether a breakdown is an expense or a crisis. Quelle/Source: https://www.nammert.com/en/insurance-broker-machinery-breakdown.php Updated: 2026-09-18 ## Isn't machinery already covered by my business contents insurance? Only against the named perils in that policy, typically fire, water, storm and burglary. Most machine losses start inside the machine: a bearing seizes, an operator makes a mistake, a power surge kills the control unit. German contents policies exclude that, and machinery breakdown insurance exists to fill exactly this gap. If you come from the UK, think of it as engineering insurance; the logic is the same, the German wording is Maschinenversicherung. ## At a glance - **Compulsory?:** No, but lessors and lenders usually require it - **Sum insured:** replacement value as new, including freight and installation - **Cover basis:** all risks, subject to listed exclusions - **Standard wordings:** AMB for fixed plant, ABMG for mobile equipment - **Loss of production:** only with separate machinery business interruption cover ## Named perils versus all risks: why the gap exists German commercial property policies are built on named perils. If the cause of a loss is not on the list, there is no cover. Machinery breakdown insurance works the other way round: it pays for any sudden, unforeseen physical damage and lists what it does not pay for. Operator error, short circuit, design and material defects and damage while moving mobile equipment are the typical claims. Unforeseen has a precise meaning here. If you or your maintenance staff knew about a defect and kept running the machine, the resulting damage is not covered. Keeping maintenance logs is the simplest way to protect your position in a claim. ## Replacement value and the underinsurance trap The sum insured must be what a comparable new machine costs today, including shipping, installation and customs duty. Many businesses enter the original purchase price from their fixed asset register. After a few years of price increases that means underinsurance, and German insurers then reduce every claim in proportion, including small ones. For larger sites a blanket policy with one total sum and automatic cover for new machines up to a limit is usually more practical than a list. You report the total once a year instead of every purchase. ## Construction plant and mobile equipment Excavators, loaders, forklifts and aerial platforms are insured under a separate machinery all risks cover based on the ABMG wording. Here theft, fire and accidents on site are the big items. For theft, insurers regularly set conditions such as immobilisers, GPS trackers or fenced compounds overnight, and a claim can fail if these were not met. Plant registered for road use also needs German motor liability insurance. Machinery cover pays for damage to your own machine only, never for damage it causes to others. ## The real cost is downtime A repair can take weeks when parts come from abroad. Wages, lease payments and rent continue while output stops. Machinery breakdown insurance pays the repair and nothing else. Loss of gross profit after a covered breakdown needs Maschinen-Betriebsunterbrechungsversicherung, machinery business interruption cover with an agreed indemnity period. For bottleneck machines it often matters more than the property cover. ## What is covered - Operator error, clumsiness and negligence - Design, material and workmanship defects - Short circuit, overvoltage and induction - Failure of control and safety devices - Centrifugal bursting, overpressure and boiler water shortage - Malicious damage and sabotage by third parties - Overturning and collision of mobile equipment - Theft of mobile equipment where agreed - Clean-up, salvage and air freight for spare parts, depending on the policy ## What is not covered - Wear and tear and gradual deterioration - Tools, moulds, dies and consumables such as oil - Defects known when the policy started - Losses covered by the manufacturer's warranty - Fire and explosion at fixed plant unless included - Loss of profit without separate business interruption cover - Intentional damage by the policyholder ## Who needs it - Manufacturers whose output depends on a few key machines - Construction and landscaping firms with their own equipment fleet - Businesses with leased or financed machinery, where the contract requires cover - Trades with expensive single machines such as joinery, metalwork or printing - Operators of technical plant such as combined heat and power units or refrigeration ## Who can do without - Office businesses without significant machinery; electronic equipment insurance is usually the better fit - Firms whose few machines are cheap enough to replace from cash flow ## What it costs Premiums are calculated as a rate per mille of the replacement value and vary widely by machine type. German insurance premiums also carry 19 percent insurance tax, which appears on the invoice on top of the net premium. **What drives the premium:** - Machine type and industry - Replacement value and age - Fixed installation or changing sites - Deductible - Theft protection for mobile equipment - Claims history - Add-ons such as business interruption, fire or theft _There are no reliable published benchmarks for machinery premiums in Germany, since every quote is rated on the actual equipment. We therefore do not give ranges. Your premium is fixed only in the quote._ ## The policy levels on the market - **Scheduled machines:** One or a few named machines at replacement value with a fixed deductible. Suits businesses built around one key asset. - **Blanket policy:** All machines at a location under one sum, new purchases covered automatically up to a limit, annual declaration. The usual choice for mid-sized firms. - **Package with interruption:** Property cover plus machinery business interruption, often with fire, theft and extra costs such as express freight included. ## How to recognise a good policy | Criterion | Minimum standard | Strong policy | Why it matters | | --- | --- | --- | --- | | Underinsurance | proportional reduction | waiver of underinsurance with index-linked sum | Otherwise an outdated list reduces every claim payment. | | New machines | covered only once declared | automatic provision for additions | Commissioning and test runs are when new machines are most at risk. | | Gross negligence | insurer may reduce payment | waiver up to a high limit | German law allows proportional reduction for gross negligence unless the policy waives it. | | Extra costs | not covered | air freight, overtime and weekend work included | Faster repair usually saves more downtime than it costs. | | Theft of mobile plant | strict security conditions | covered with clear, achievable conditions | Theft is one of the most frequent total losses on construction sites. | | Foundations and building work | excluded | foundations and reinstatement of walls included | Large machines often cannot be removed without structural work. | | Deductible | fixed per claim | choice of amount, no percentage deductible on theft | A percentage deductible on a stolen excavator can reach five figures. | ## Insurers on the German market Machinery breakdown cover belongs to the engineering lines and is written by the large German property insurers and some specialists. The differences lie in wordings and in which industries an insurer is willing to accept. - **Allianz**: engineering lines for SMEs and trades, tied agents and brokers - **AXA**: commercial lines via agents and brokers - **HDI**: part of the Talanx group, SMEs and professionals - **HDI Global**: Talanx industrial arm for larger risks - **Zurich**: German operation of the Zurich group, commercial business via brokers - **R+V**: insurer of the German cooperative banks, large commercial book - **VHV**: broker-focused insurer with a construction industry focus - **Helvetia**: German company of the Swiss Helvetia group, engineering lines via brokers 155 insurers supervised by BaFin, the German regulator, are licensed for this class of insurance. (Hagel-, Frost- und sonstige Sachschäden). Source: BaFin company database, retrieved 2026-09-18. Insurers from other EU countries selling through a branch or without a German office are not included. ## Typical claims and who pays - **New hire crashes the CNC spindle** (roughly €10,000 to €60,000): Operator error is exactly what machinery breakdown insurance is designed for. You only carry the agreed deductible. - **Excavator vanishes from site overnight** (five to six figures, depending on size): Theft of mobile plant is an extension, not a default. Where it is included, German insurers usually require GPS tracking, an immobiliser or a fenced compound. - **Spare part air-freighted from Asia** (often €2,000 to €10,000 in extra freight): Basic cover pays the repair with standard shipping. Air freight, overtime and express charges need an extended policy with a sublimit. - **Ex-employee sabotages the line** (anywhere from four to six figures): Malicious damage by third parties is part of the standard cover, and a former employee counts as a third party. Report it to the police as well. - **Worn bearings finally seize** (often four to five figures): Gradual wear is excluded in every German policy. A bearing that fails after years of running is maintenance, not an insured event. - **Three weeks with no production** (three weeks of gross profit): The policy pays to fix the machine, not for lost output. That needs separate machinery business interruption cover. ## Myth or truth - „Machinery insurance is compulsory for businesses in Germany." ✘ No. There is no legal duty to insure machines in Germany. In practice, leasing companies and banks financing the equipment usually make it a condition of the contract. - „If a German employee wrecks a machine through carelessness, they usually pay little or nothing." ✔ True. German employment case law limits employee liability: nothing for slight negligence, a share for medium negligence. Good policy wordings also waive recourse against staff except for intent. - „Tools and moulds are part of the machine, so they are covered too." ✘ No. Tools, moulds, dies and screens are replaced regularly and are excluded as standard. Expensive injection moulds can be added as a separate item for an extra premium. - „Damage caused by a design flaw from the manufacturer can still be covered." ✔ True. Design, material and workmanship defects are core insured causes. While a warranty applies, though, the manufacturer has to pay first. - „Machinery insurance only protects the machine while it is running." ✘ Wrong. Standard German wordings also cover the machine during cleaning, servicing, dismantling and reassembly at the insured location. Moving it to another site is a different matter. ## Common mistakes - Insuring book value instead of today's replacement cost - Never updating the machinery schedule after the first year - Covering the repair but not the downtime - Ignoring theft conditions for site equipment - Assuming UK or US style engineering inspection is included; in Germany it is usually a separate contract ## FAQ ### Does machinery insurance pay if an employee operates the machine wrongly? Yes. Operator error is one of the main reasons the cover exists. German law lets the insurer reduce payment for gross negligence, so check whether your policy waives this defence. ### Is wear and tear covered? No. Gradual wear is predictable and not an insured event. If a worn part breaks suddenly and damages other components, the damage to those other parts is normally covered. ### How much does machinery breakdown insurance cost in Germany? It is priced as a rate per mille of replacement value plus 19 percent insurance tax. Rates depend on machine type, industry, shifts and deductible, so a quote for your equipment is the only meaningful figure. ### My leasing company requires insurance. What do I need? Usually machinery breakdown cover at replacement value, with the lessor noted as loss payee. Read the lease: some contracts also require theft cover for mobile equipment or a maximum deductible. ### Is lost production covered? Not by the machinery policy itself. You need machinery business interruption cover, which pays ongoing costs and lost profit while the machine is out of action. ### Is a stolen excavator covered? Under mobile plant all risks with theft included, yes, provided the security conditions were met. Typical conditions are immobilisers, removed keys and locked compounds or tracking systems. ### Can a foreign company insure machines located in Germany? Yes, through a German policy or an international programme with a local German policy. Local policies make claims handling and German tax compliance easier; your group insurer may already have such a structure. ### Can older machines still be insured? Yes, and often that is when cover matters most, because the manufacturer's warranty has expired and spare parts are expensive. Some insurers pay actual value instead of replacement value above a certain age. ### What should I do after a breakdown? Report the loss immediately, stop using the machine and keep damaged parts. Agree with the insurer before repairs start whether a loss adjuster will inspect. Scrapping parts early makes the cause hard to prove. ## Legal basis and sources - [Insurance Contract Act (VVG, German)](https://www.gesetze-im-internet.de/vvg_2008/) - [BaFin company database (licensed insurers)](https://portal.mvp.bafin.de/database/InstInfo/) ## Request quotes We obtain quotes and come back with a comparison. Free of charge and without obligation: the insurer pays our commission. You can write in English. https://www.nammert.com/en/insurance-broker-machinery-breakdown.php#anfrage --- NAMMERT Assekuradeur GmbH, insurance broker licensed under section 34d(1) of the German Trade Regulation Act, broker register no. D-C08Q-TOSD4-37. For boat and yacht insurance we act as underwriting agency, not as broker. NAMMERT Assekuradeur GmbH, Karl-Marx-Straße 4, 15711 Königs Wusterhausen, +49 3375 29 12 77, info@nammert.com. Wikidata: Q141141479.