Resolving a Coverage Dispute Following Damage to an Industrial Moisture Sensor under an Electronic Equipment Insurance Policy

Project Summary:

Reason for Deviation:

The claim encountered a coverage challenge during the survey process as the surveyor concluded that the damage originated from corrosion, which is excluded under the Electronic Equipment Insurance Policy (EEI). The primary issue was to establish the actual proximate cause of the loss and determine whether the damage to the insured equipment was admissible under the policy.

Brief Details of the Claim:

On 16th February 2026, a breakdown occurred in the automatic water dosing system of the Kunkel Wagner make Sand Plant. It was reported to us that the Moisture Sensor had suffered an accidental breakdown during operation. Based on the available information, the claim was lodged with the insurer under the Electronic Equipment Insurance Policy.

Major Challenges:

During the surveyor's inspection, it was observed that the damage had occurred due to the rusting of the V-plough conveyor belt. The rusted V-plough fell onto the Sand Plant Moisture Sensor, resulting in damage to the sensor.

Based on this observation, the surveyor concluded that the loss had originated from corrosion and was therefore not admissible under the policy.

Actions Taken by Salasar:

After analysing the sequence of events, our claims team prepared a detailed technical submission for the surveyor.

Our assessment established that the insured equipment was the Moisture Sensor, which had not been directly damaged due to rust or corrosion. Instead, the accidental damage occurred when the V-plough of the conveyor system, which was not an insured item, fell onto the insured equipment, causing sudden and accidental physical damage.

Accordingly, we submitted that the proximate cause of the loss was the accidental falling of the V-plough, and not rusting or corrosion.

Further, we demonstrated that under the terms and conditions of the Electronic Equipment Insurance Policy, such accidental damage is covered since it is not specifically excluded under the policy.

Final Outcome:

The surveyor accepted our technical submissions and agreed with our interpretation of the proximate cause of the loss. Consequently, the claim was considered admissible under the Electronic Equipment Insurance Policy.