Policies are an important aspect of society. They give support at the time of need. For this reason, various government organizations and private business entities have created different policies to give support at bad times. It helps individuals and businesses to recuperate their loss, and they can start afresh beginning in life.
CPM and Motor are two distinctive policies that give individual and contractor required support at the time of need. For an individual, his vehicle is one of his topmost assets and liabilities. Similarly, for a civil contractor, the equipment and machinery are his biggest asset and liability.
CPM Policy vs Motor Policy
The difference between CPM Policy and Motor Policy is that CPM Policy is a system of insurance which takes care of the claims arising out of an accident. Motor Policy is a system of insurance which takes care of the liabilities or penalties arising out of the accident.
Comparison Table Between CPM Policy and Motor Policy (in Tabular Form)
|Parameter of Comparison||CPM Policy||Motor Policy|
|Intended for||Contractor’s equipment and machinery||Engine-powered motor vehicles|
|Covered objects||Cranes, Rollers, Excavators, Dumpers, Drilling Machines, Earthmovers, etc.||Car, two-wheelers, commercial vehicles.|
|General Coverage||Accidental and weather damage to the machinery & equipment. Malicious Damage from theft, burglary, riot, terrorism, etc||Accidental damage to the vehicles and victims. Malicious Damage like theft, burglary, and loss of the vehicle.|
|General Exclusions||Negligence against the equipment, damage due to war or warlike commotion, general wear and tear, etc.||If the vehicle used for any illegal activities, If the driver’s license becomes invalid, or during the time of the accident if the driver remained influenced under alcohol|
|Requirement||CPM policy is not mandatory in every state.||The motor policy is mandatory in every state.|
What is CPM Policy?
An insurance policy that covers the contractor’s part and machinery are universally known as CPM policy. This insurance policy is a financial safeguard for plant and machinery damage. This insurance policy offers financial security for various types of equipment and machinery like cranes, rollers, excavators, dumpers, drilling machines, earthmoving types of equipment, etc.
Generally, the CPM policy covers various types of accidental damage. It may include fire, earthquake, collapse, collision, impact, flood, storm, inundation, water damage, etc. Alongside these damages, the CPM policy also covers various types of Malicious Damage like theft, burglary, riot, terrorism, etc.
Due to a few reasons, the insurance term can be voided. These general exclusions reasons are willful act or negligence against the equipment, damage due to war or warlike commotion, general wear and tear, Rust, lack of use, etc. In these conditions, the insurance company may refuse to provide financial coverage on the contractor’s part and machinery.
With the payment of an additional premium, the contractor can extend the CPM policy on certain things. It may include surrounding property of the owner, derby clearance, express freight, third party liability, etc.
Even though the CPM Policy is beneficial for the contractor, but it is not mandatory for every state. The contractor can choose the policy according to his project location.
What is Motor Policy?
The objectivity of motor policy is to give vehicles financial protection from physical damages & loss which occurs from accidental and natural calamities. This insurance policy covers cars, two-wheelers, and commercial vehicles.
Normally, the motor policy gives financial protection to vehicles from road accidents, fire, theft, burglary, riot, flood, earthquake, etc. Alongside these damages, the motor policy also covers third party liabilities, health, and death related compensation.
The motor policy insurance can be voided under a few circumstances. The insurance company may refuse to pay for the damage if the vehicle used for any illegal activities, If the driver’s license becomes invalid, or during the time of the accident if the driver remained influenced under alcohol or drug abuse.
Few insurance companies also offer additional benefits to motor policies. In exchange for an additional premium, they offer depreciation cover, engine protection cover, road assistance, towing, and cashless network garage. According to the law of various government agencies, motor policy insurance is mandatory for every state. Driving a vehicle without valid motor policy insurance can be charged with a criminal offense.
Main Differences Between CPM Policy and Motor Policy
- The CPM policy is an insurance system for civil contractors and their machinery. Where the Motor policy is an insurance system for vehicle owners.
- The CPM policy cover contractor’s equipment and mercenaries such as cranes, rollers, excavators, dumpers, drilling machines, earthmovers, etc. The Motor policy gives coverage to the insured car, two-wheelers, and commercial vehicles.
- General coverage against CPM policy is fire, water damage, accidental damage, theft & burglary, etc. On the other hand, the Motor policy gives insurance coverage for third party liabilities, road accidents, death, loss of vehicle, etc.
- Exclusions from CPM policy are willful negligence against the equipment, damage caused by war, and general wear & tear. Exclusions from the motor policy can happen if the vehicle is used for any illegal purpose, void driving license, or the driver remain influenced by alcohol or drugs at the time of the accident.
- Around the world, the CPM policy is not mandatory everywhere, in many states, it is optional for the contractors. However, in most states the motor policy is mandatory, and the driver must have legitimate vehicle insurance.
Uncertainty is a big part of life. Here no one is sure, what natural or man-made calamity will hit them and their businesses. For this reason, different governments around the world created various policies to protect them. The CPM policy and motor policy are these types of arrangements.
The CPM policy is specifically designed to give financial protection to civil contractors. This policy lets them financially secure their machinery and equipment. Where the motor policy gives significant financial protection to the vehicle owner in case of an accident or loss of the vehicle. It also gives coverage to the victim of the accident.
However, for both policies, the owner must follow the rules and regulations to avoid exclusion from the policies.