BPV Insurance Malaysia: Boiler & Pressure Vessel Coverage, DOSH Requirements & Why It's Mandatory

Your DOSH-registered boiler has a valid Certificate of Fitness. Your chargeman shows up every day. But here's what many plant operators miss: you cannot obtain or renew that CF without boiler and pressure vessel (BPV) insurance in force. Factories and Machinery Act 1967 makes this explicit.

This guide covers everything plant engineers, chargemen, and compliance managers need to know about BPV insurance in Malaysia: why it's mandatory, how it connects to your DOSH Certificate of Fitness, what's covered, what's excluded, and how BOLOP protects your revenue when vessels fail.

This guide covers:

• Why BPV insurance is mandatory under FMA 1967
• The direct connection between BPV insurance and your DOSH Certificate of Fitness
• What BPV insurance covers and standard exclusions
• BOLOP extension for revenue protection
• BPV vs Machinery Breakdown vs Fire/IAR coverage boundaries
• Premium factors and how to structure your BPV programme
• Common claims scenarios and mistakes to avoid

Disclaimer: This article provides general guidance on insurance coverage available in the Malaysian market as of February 2026. Policy terms, conditions, and availability vary by insurer. Always review your specific policy wording or consult a qualified insurance professional before making coverage decisions.

What Is BPV Insurance?

Boiler and Pressure Vessel (BPV) insurance is an engineering insurance policy that covers sudden and unforeseen physical loss or damage to boilers, pressure vessels, and related pressure plant. It is classified under engineering insurance, not property insurance, because the risk profile and underwriting approach are fundamentally different from fire or property policies.

The core peril BPV covers is the failure of pressure containment. When a vessel designed to hold pressure suddenly bursts, collapses, cracks, or deforms, BPV insurance responds. This includes internal explosion (overpressure), implosion, collapse from vacuum conditions, and overheating that leads to structural failure.

BPV insurance typically consists of two main sections:

Section	What It Covers	Who Benefits
Section I: Material Damage	Physical loss or damage to the insured boiler/pressure vessel from sudden and unforeseen causes	Plant owner (vessel repair/replacement cost)
Section II: Third-Party Liability	Bodily injury or property damage to third parties arising from a vessel accident	Third parties injured or whose property is damaged
BOLOP Extension	Loss of gross profit when a BPV claim causes production shutdown	Plant owner (revenue protection)

The critical distinction: BPV covers internal pressure failure. If your boiler catches fire from an external source, that's a Fire or IAR insurance claim. If the boiler explodes from overpressure, that's a BPV claim.

Why BPV Insurance Is Mandatory in Malaysia

BPV insurance is not optional in Malaysia. The Factories and Machinery Act 1967 (FMA 1967) explicitly requires insurance for both steam boilers and unfired pressure vessels. This is one of the few insurance types that Malaysian law mandates by statute, not just by commercial practice or contract requirement.

The Legal Basis: FMA 1967

FMA 1967 governs all steam boilers (Part III) and unfired pressure vessels (Part IV) in Malaysian workplaces. The Act requires every owner to insure their vessels with a policy from a licensed insurer before operating them.

FMA 1967 Provision	Requirement	Applies To
Part III (Steam Boilers)	Every owner shall insure and keep insured the steam boiler in approved form	All registered steam boilers
Part IV (Unfired Pressure Vessels)	Every owner shall insure and keep insured the unfired pressure vessel in approved form	All registered unfired pressure vessels
Registration Requirement	No boiler/vessel shall be used without registration and valid Certificate of Fitness	All boilers and pressure vessels above prescribed thresholds
Insurance Condition	Owner shall not use or cause to be used such vessel unless a policy of insurance is in force	All DOSH-registered vessels
Insurer Requirement	Policy must be from an insurer licensed under the Financial Services Act 2013	All BPV policies

The law is clear: no BPV insurance means no legal operation. Operating a registered steam boiler or registered pressure vessel without valid insurance is an offence under FMA 1967, punishable by fine and/or imprisonment.

Who Must Buy BPV Insurance?

If You Have This...	BPV Insurance Required?	Reason
DOSH-registered steam boiler	Yes, mandatory	FMA 1967 Part III
DOSH-registered unfired pressure vessel	Yes, mandatory	FMA 1967 Part IV
Compressed air receiver (above threshold)	Yes, mandatory	Classified as unfired pressure vessel
Hot water boiler (above threshold)	Yes, mandatory	Classified as steam boiler under FMA
Small air compressor (below DOSH threshold)	Not mandatory, but recommended	Below registration threshold; still carries explosion risk
Domestic water heater	No	Not covered under FMA 1967 (applies to factories/workplaces)

The simple rule: if DOSH requires you to register it, you need BPV insurance for it.

How BPV Insurance Connects to Your DOSH Certificate of Fitness

The Certificate of Fitness (CF) and BPV insurance are inseparable. You cannot have one without the other. DOSH requires proof of valid BPV insurance as part of the CF application and renewal process. If your BPV policy lapses, your CF is effectively invalid.

The CF and BPV Insurance Process

Step	Action	Who Does It
1	Purchase BPV insurance from licensed insurer	Plant owner (via insurance broker)
2	Arrange inspection by DOSH-approved Competent Person	Plant owner
3	Competent Person conducts physical inspection and testing	Approved inspector
4	Submit inspection report + proof of BPV insurance to DOSH	Competent Person / Plant owner
5	DOSH reviews and issues Certificate of Fitness	DOSH
6	Maintain BPV insurance throughout CF validity period	Plant owner
7	Renew BPV insurance before CF renewal	Plant owner

Many plant operators treat BPV insurance as a document they need for DOSH paperwork. That's only half the picture. The insurance also protects you financially when things go wrong. A pressure vessel failure can cost hundreds of thousands in equipment damage alone, not counting third-party injuries or production shutdown.

If you need guidance on the DOSH registration process itself, see our guides on steam boiler registration and pressure vessel registration requirements.

What BPV Insurance Covers

BPV insurance uses an "all risks" style wording for the specific items listed in the policy schedule. This means it covers sudden and unforeseen physical loss or damage from any cause not specifically excluded. The key perils it responds to are related to pressure containment failure.

Covered Perils

Peril	Description	Example Scenario
Explosion / Implosion	Internal pressure exceeds vessel design limits, causing rupture; or vacuum collapse	Safety valve failure allows overpressure, boiler shell ruptures
Collapse / Crumpling	Structural failure of vessel walls under normal or abnormal operating conditions	Furnace crown collapse in fire-tube boiler due to low water condition
Bursting / Fracturing	Sudden crack propagation or material failure	Weld defect in pressure vessel causes catastrophic crack under operating pressure
Bulging / Deformation	Permanent distortion of vessel shell or tubes beyond repair tolerances	Boiler tube bulges due to localised overheating from scale build-up
Overheating	Heat damage to vessel components when cooling or water supply fails	Low water condition causes boiler tubes to overheat and fail
Defective Material	Latent manufacturing defect that manifests during operation	Hidden inclusion in vessel plate causes stress fracture during normal operation
Faulty Repair / Workmanship	Previous repair work fails and causes vessel damage	Substandard weld during maintenance gives way under operating pressure
Operator Error	Accidental misoperation causing damage to the vessel	Chargeman fails to maintain adequate water level, causing dry firing

Section II: Third-Party Liability

Section II covers legal liability to third parties when a vessel accident causes bodily injury or property damage. If your boiler explodes and injures a contractor working nearby, or damages a neighbouring property, this section responds. The limit is typically separate from the Section I material damage sum insured.

What BPV Insurance Does NOT Cover

Understanding exclusions is just as important as understanding coverage. BPV insurance has specific exclusions that define its boundaries against other insurance types.

Exclusion	Why It's Excluded	Which Policy Covers This Instead
Fire, lightning, external explosion	These are property perils, not engineering perils	Fire Insurance or IAR
Flood, storm, tempest	Natural perils covered under property insurance	IAR or Fire + Special Perils
Theft	Not an engineering peril	IAR or standalone theft policy
Gradual deterioration, corrosion, erosion	Predictable wear; should be managed through maintenance	None (maintenance responsibility)
Wear and tear, cavitation	Normal ageing; not sudden and unforeseen	None (maintenance responsibility)
Consequential / business losses	Revenue loss requires separate coverage	BOLOP (add-on to BPV)
War, nuclear, terrorism	Standard market exclusion	Specialist terrorism pool (if available)
Wilful act or gross negligence	Intentional damage is uninsurable	None
Aesthetic defects not affecting function	Cosmetic issues don't impair operation	None
Pre-existing damage known to insured	Must be disclosed; not sudden and unforeseen	None

The most important exclusion to understand: Fire is excluded from BPV. If your boiler room catches fire and the boiler is damaged by flames, that claim goes to your Fire or IAR policy. BPV only covers internal pressure-related failures. This is why factories need both BPV insurance AND Fire/IAR insurance to be fully protected.

Equipment Covered Under BPV Insurance

BPV insurance applies to a wide range of pressure equipment found across Malaysian industries. Each item must be individually listed in the policy schedule with its details (type, capacity, working pressure, year of manufacture, serial number, and sum insured).

Equipment Type	Common Applications	Industries
Fire-tube steam boilers	Process heating, sterilisation, laundry, food processing	Food & beverage, textile, palm oil, rubber
Water-tube steam boilers	Power generation, high-pressure process steam	Power plants, chemical, petrochemical
Thermal oil heaters	High-temperature heating without steam	Plastics, rubber, chemical, food processing
Air receivers	Compressed air storage for pneumatic systems	All manufacturing, automotive, electronics
Process pressure vessels	Reactors, distillation columns, separators	Chemical, petrochemical, pharmaceutical
Heat exchangers (under pressure)	Shell-and-tube, plate heat exchangers	Chemical, power, HVAC, food processing
Autoclaves	Sterilisation, composite curing, rubber vulcanising	Healthcare, rubber, aerospace, food
LPG/gas storage vessels	Bulk gas storage (LPG, nitrogen, oxygen)	Gas distributors, hospitals, manufacturing
Digesters	Pulp processing, biogas generation	Palm oil, paper, waste treatment
Vulcanisers	Rubber curing under heat and pressure	Rubber manufacturing

A single factory may have dozens of insurable pressure items. A palm oil mill might have 3-5 boilers plus multiple air receivers and heat exchangers. A chemical plant could have 50+ pressure vessels. Each must be scheduled in the BPV policy with the correct sum insured.

BPV vs Machinery Breakdown vs Fire/IAR: Coverage Boundaries

This is where most confusion occurs. Malaysian factories typically need three separate engineering and property insurance policies, and understanding which one responds to which scenario is critical for avoiding coverage gaps.

Feature	BPV Insurance	MB Insurance	Fire/IAR Insurance
What it covers	Boilers and pressure vessels only	Non-pressure mechanical and electrical equipment	Buildings, contents, stock, all fixed assets
Key perils	Internal explosion, collapse, bursting, overheating	Mechanical/electrical breakdown, short circuit, bearing failure	Fire, lightning, flood, storm, all risks (IAR)
Equipment examples	Steam boilers, air receivers, autoclaves, process vessels	Motors, gearboxes, compressor bodies, generators, CNC machines	Factory building, warehouse, stock-in-trade, furniture
Loss-of-profits add-on	BOLOP	MLOP	BI (Business Interruption)
Mandatory?	Yes (FMA 1967)	No, but strongly recommended	Only if bank-financed or lease requires it
DOSH connection	Required for Certificate of Fitness	No direct DOSH requirement	No direct DOSH requirement
Inspection required?	Yes (DOSH Competent Person)	Recommended (insurer's engineer)	No (but fire safety inspections by BOMBA)

Overlap Scenario: Compressor

A common question: which policy covers my air compressor? The answer depends on which part fails. The compressor motor (electrical/mechanical component) is covered under Machinery Breakdown. The compressor air receiver (pressure vessel component) is covered under BPV. If fire damages the entire compressor unit, that goes to Fire/IAR. Three policies, three different failure modes, same piece of equipment.

BOLOP: Protecting Revenue When Vessels Fail

Boiler Loss of Profits (BOLOP) is the revenue protection extension for BPV insurance. It works exactly like MLOP does for Machinery Breakdown, and BI does for Fire/IAR. When a valid BPV claim causes your production to stop, BOLOP covers the lost gross profit during the repair or replacement period.

How BOLOP Works

BOLOP Element	Description
Trigger	Valid BPV claim must exist. No BPV claim = no BOLOP claim.
Covers	Loss of gross profit (turnover minus variable costs) during the interruption
Standing charges	Fixed costs that continue even when production stops (rent, salaries, loan repayments)
Increased cost of working	Extra costs to minimise the loss (e.g., renting temporary boiler, outsourcing production)
Indemnity period	Maximum period of coverage, typically 6 to 24 months
Time excess	Waiting period before coverage starts (e.g., 14 days, 30 days)
Sum insured	Gross profit for the selected indemnity period

Why BOLOP Matters: The Real Cost of Vessel Failure

Consider a food processing factory that depends on a single steam boiler for its production line. The boiler is worth RM500,000. If the boiler's furnace collapses, BPV insurance covers the RM500,000 repair cost. But the production shutdown while waiting for repairs could cost RM200,000 per month in lost output. If repairs take 4 months, that's RM800,000 in lost revenue on top of the RM500,000 equipment cost. Without BOLOP, you absorb that RM800,000 yourself.

BOLOP is not mandatory. But for any factory where boiler failure means production stops, it's the difference between a manageable insurance claim and a business-threatening event.

Five Loss-of-Profits Policies in Malaysian P&E Insurance

Loss-of-Profits Policy	Attaches To	Triggers When
BI (Business Interruption)	Fire / IAR	Fire, flood, natural perils, or all-risks damage to property
MLOP (Machinery Loss of Profits)	Machinery Breakdown	Mechanical/electrical breakdown of non-pressure machinery
BOLOP (Boiler Loss of Profits)	BPV Insurance	Explosion, collapse, or failure of boiler/pressure vessel
ILOP (IT Loss of Profits)	EEI	Electronic equipment failure (servers, data systems, control equipment)
DSU (Delay in Start-Up)	CAR / EAR	Construction/erection damage delays project handover

Each loss-of-profits policy only triggers when its parent policy has a valid claim. You cannot claim BOLOP without a valid BPV claim, just as you cannot claim MLOP without a valid MB claim.

BPV Insurance Premium Factors

BPV premiums are calculated based on the risk profile of your specific vessels and operating environment. Unlike fire insurance (which has a tariff structure in Malaysia), BPV premiums are individually rated by engineering underwriters.

Premium Factor	Impact on Premium	Why It Matters
Vessel type and design	High-pressure vessels cost more to insure	Operating pressure directly correlates with explosion severity
Age of vessels	Older vessels attract higher premiums	Material fatigue and corrosion increase with age
Operating pressure and temperature	Higher pressure/temperature = higher premium	Greater stored energy means greater damage potential
Material of construction	Exotic alloys may increase replacement cost but reduce failure risk	Corrosion-resistant materials last longer but cost more to replace
Maintenance regime	Good maintenance records can reduce premium	Well-maintained vessels fail less often
Inspection history	Clean inspection reports support lower rates	DOSH CF renewal without issues signals good risk quality
Industry/application	Chemical processing rated higher than general manufacturing	Corrosive media, extreme conditions increase failure risk
Sum insured	Higher sum insured = higher premium (but not linear)	Replacement cost of vessel determines maximum claim
Claims history	Previous claims significantly increase premium	Past claims indicate ongoing risk issues
Deductible selected	Higher deductible = lower premium	You absorb small losses, insurer covers catastrophic ones

BPV premiums are generally lower than MB premiums for the same factory because BPV covers a narrower range of equipment (only pressure plant) and perils (only pressure-related failures). But the consequences of a BPV loss can be far more severe than most MB claims because pressure vessel failures involve stored energy that can cause catastrophic damage.

BPV Claims Scenarios for Malaysian Factories

Understanding real-world failure scenarios helps you evaluate whether your current BPV coverage and sum insured are adequate.

Scenario 1: Steam Boiler Furnace Collapse

Detail	Value
Industry	Palm oil mill
Equipment	Fire-tube boiler, 10 tonnes/hour capacity
Cause	Low water condition causes furnace crown overheating and collapse
BPV claim (Section I)	Boiler retube and furnace replacement
BOLOP claim	3-month production shutdown during peak harvest season
Key lesson	Low water protection devices are critical; BOLOP claim often exceeds BPV material damage claim

Scenario 2: Air Receiver Explosion

Detail	Value
Industry	Automotive parts manufacturer
Equipment	Compressed air receiver, 10 bar working pressure
Cause	Internal corrosion weakens vessel wall; pressure relief valve blocked; vessel ruptures
BPV claim (Section I)	Air receiver replacement
BPV claim (Section II)	Blast damages nearby equipment and injures two workers
Key lesson	Even "low-risk" vessels like air receivers can cause serious damage; Section II TPL is essential

Scenario 3: Chemical Reactor Vessel Failure

Detail	Value
Industry	Chemical processing plant
Equipment	Stainless steel reactor vessel, high-pressure/high-temperature operation
Cause	Stress corrosion cracking in vessel wall propagates suddenly under operating pressure
BPV claim (Section I)	Vessel replacement (long lead time for specialised reactor)
BOLOP claim	6-12 month production interruption while replacement vessel is manufactured and installed
Key lesson	Specialised vessels have long replacement lead times; indemnity period must reflect this reality

Common Mistakes in BPV Insurance

Mistake	Consequence	How to Avoid
Treating BPV as "just paperwork" for DOSH	Minimum coverage with inadequate sum insured	Calculate actual replacement cost for each vessel
Not scheduling all pressure items	Unscheduled vessels are not covered; also a DOSH compliance gap	Conduct annual pressure equipment audit and update schedule
Skipping BOLOP	Production shutdown costs not covered (often exceeds equipment damage)	Calculate monthly revenue dependency on each major vessel
Underinsuring vessel replacement costs	Claim settlement is less than actual replacement cost	Use current replacement value including freight, installation, and commissioning
Confusing BPV with Fire/IAR coverage	Assuming fire policy covers boiler explosion (it doesn't)	Understand that BPV covers internal pressure failure, Fire/IAR covers external perils
Letting BPV lapse between renewals	CF becomes invalid; operating without insurance is an offence under FMA 1967	Set renewal reminders 60 days before expiry; align BPV and CF renewal dates
Not disclosing vessel modifications	Claims may be denied if insurer wasn't informed of changes	Notify insurer of any modifications, repairs, or changes to operating conditions

BPV Insurance Checklist

Item	Status
All DOSH-registered boilers and pressure vessels listed in policy schedule	☐
Sum insured reflects current replacement cost (not book value or original purchase price)	☐
Section II (Third-Party Liability) included with adequate limit	☐
BOLOP extension considered for production-critical vessels	☐
BOLOP indemnity period matches realistic repair/replacement timeline	☐
BPV policy renewal date aligned with DOSH CF renewal date	☐
Newly installed vessels added to policy within 30 days	☐
Vessel modifications disclosed to insurer	☐
Deductible level appropriate for your risk appetite and cash flow	☐
BPV, MB, and Fire/IAR policies reviewed together to confirm no coverage gaps	☐

Industry-Specific BPV Requirements

Industry	Typical Pressure Equipment	BPV Focus	BOLOP Priority
Palm oil mills	Steam boilers (biomass-fired), sterilisers, digesters	Multiple large boilers; seasonal peak demand	High (single boiler failure halts entire mill)
Food & beverage	Steam boilers, autoclaves, retorts, sterilisation vessels	Product safety depends on sterilisation pressure	High (food safety shutdown = total production loss)
Chemical processing	Reactors, columns, heat exchangers, storage vessels	Corrosive media; high-pressure/temperature operation	Critical (specialised vessel replacement: 6-18 months)
Power generation	High-pressure water-tube boilers, steam drums, headers	Very high pressure/temperature; catastrophic failure potential	Critical (power outage affects grid/customers)
Rubber manufacturing	Vulcanisers, autoclaves, thermal oil heaters, air receivers	Vulcanising pressure vessels operate at high cycle frequency	Medium to High (depends on single-vessel dependency)
General manufacturing	Air receivers, small process vessels, heating systems	Often overlooked; air receivers are most common BPV item	Low to Medium (redundancy often available)

Chargeman Requirement and BPV Insurance

DOSH requires a licensed chargeman for certain boiler installations. The chargeman is responsible for the safe daily operation of the boiler, including maintaining proper water levels, monitoring pressure, and performing routine checks. The presence of a qualified chargeman is both a DOSH compliance requirement and a factor that can positively influence your BPV insurance terms.

From an insurance perspective, having the correct category of chargeman for your boiler installation demonstrates good operational risk management. Conversely, operating a boiler without the required chargeman is a breach of FMA 1967 that could complicate your insurance claim.

FAQ

Is BPV insurance mandatory in Malaysia?

Yes. FMA 1967 requires every owner of a DOSH-registered steam boiler or unfired pressure vessel to maintain insurance in an approved form from a licensed insurer. You cannot legally operate a registered vessel without valid BPV insurance. This is one of the few insurance types mandated by Malaysian statute.

What is the difference between BPV insurance and Machinery Breakdown insurance?

BPV covers boilers and pressure vessels against pressure-related failures (explosion, collapse, bursting). Machinery Breakdown covers non-pressure mechanical and electrical equipment against mechanical/electrical failure. They cover different equipment types and different perils. A factory with both pressure vessels and machinery needs both BPV and MB policies.

Does BPV insurance cover fire damage to my boiler?

No. Fire damage to a boiler is covered under your Fire or IAR insurance policy. BPV specifically covers internal pressure-related failures (explosion from overpressure, collapse, bursting). This is why factories need both BPV and Fire/IAR coverage.

What is BOLOP and do I need it?

BOLOP (Boiler Loss of Profits) covers the lost gross profit when a BPV claim causes your production to shut down. If your factory depends on a boiler for production and can't operate without it, BOLOP is essential. The production loss during repairs often exceeds the equipment damage cost itself.

Can I get my DOSH Certificate of Fitness without BPV insurance?

No. DOSH requires proof of valid BPV insurance as part of the CF application and renewal process. Without BPV insurance, DOSH will not issue or renew your Certificate of Fitness. If your BPV policy lapses mid-term, your CF is effectively invalidated.

How is the BPV sum insured calculated?

The sum insured should reflect the current replacement cost of each vessel, including the cost of delivery, installation, and commissioning. Using book value or original purchase price will result in underinsurance. For specialised vessels (custom-built reactors, high-specification boilers), get a current quotation from the manufacturer or supplier.

Are pressure piping systems covered under BPV?

Standard BPV policies cover the pressure vessels themselves. Interconnecting pressure piping may or may not be covered depending on the policy wording and schedule. Many insurers offer pressure piping as an extension. Check your policy schedule carefully and discuss piping coverage with your broker.

How often do I need to renew BPV insurance?

BPV insurance is typically renewed annually, aligned with your DOSH Certificate of Fitness renewal cycle. You should renew your BPV policy before or at the same time as your CF renewal to ensure continuous coverage. Set reminders at least 60 days before expiry to allow time for the renewal process.

What happens if my boiler fails and I only have minimum BPV coverage?

If your sum insured is less than the actual replacement cost, you'll receive a claim payment that doesn't fully cover the replacement. You'll have to fund the shortfall yourself. This is common when owners buy minimum BPV coverage just to satisfy the DOSH requirement. Adequate coverage means insuring at full replacement value.

Does BPV insurance cover the cost of DOSH re-inspection after a vessel failure?

Standard BPV policies cover the physical repair or replacement of the damaged vessel. The cost of DOSH re-inspection and certification after repairs is typically not covered under the policy but may be included as a policy extension. Check with your insurer whether CF reinstatement costs are included.

Foundation Conclusion

BPV insurance isn't just a document you need for your DOSH Certificate of Fitness. It's financial protection against one of the most destructive events that can occur in an industrial facility. Pressure vessel failures release stored energy instantaneously, causing equipment damage, production shutdown, and potential injuries in a single event.

Every plant with DOSH-registered boilers or pressure vessels needs BPV insurance by law. But the smart approach goes beyond compliance: adequate sum insured at replacement value, Section II third-party liability, and BOLOP for production-critical vessels. Combined with your Machinery Breakdown and Fire/IAR policies, BPV completes the engineering insurance layer that protects your physical plant.

Talk to our risk specialists about structuring your BPV programme