Boiler & Pressure Vessel (BPV) Insurance Malaysia
Engineering insurance covering explosion, collapse, and accidental damage to boilers, pressure vessels, and steam plant. Protects against perils excluded by Fire, IAR, and MB policies.
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Your fire insurance covers fire damage. Your IAR covers accidental external damage. Your machinery breakdown covers internal mechanical faults. But all three exclude the same peril: explosion or collapse of boilers and pressure vessels. That's a dedicated engineering class risk, and it requires its own policy.
BPV (Boiler & Pressure Vessel) insurance covers the explosion, collapse, cracking, and overheating of pressurised plant and equipment. It also covers damage to surrounding property and third-party liability from these incidents. If your facility operates boilers, autoclaves, air receivers, or any pressurised equipment registered with DOSH, BPV insurance fills a gap that no other policy covers.
This guide covers:
- Why BPV is excluded from Fire, IAR, and MB policies
- What BPV insurance covers (Sections I, II, and III)
- Equipment types and DOSH Certificate of Fitness connection
- Who needs BPV insurance in Malaysia
- Premium factors and indicative ranges
- Standard exclusions and optional extensions
- Claim scenarios for Malaysian industrial facilities
- How BPV completes your P&E programme
Why Boiler and Pressure Vessel Perils Need a Separate Policy
Boiler explosions and pressure vessel failures are among the most destructive events that can occur in an industrial facility. A boiler explosion can level an entire building. A pressure vessel rupture can send metal fragments hundreds of metres. The energy stored in pressurised steam or gas is enormous, and when containment fails, the release is violent and instantaneous.
Every standard fire, IAR, and MB policy contains an explicit exclusion for explosion or collapse of boilers and pressure vessels. This isn't an oversight. It's a deliberate policy structure because:
- Boiler/PV risks require specialist engineering assessment
- The damage potential (blast radius, surrounding property, third-party injury) is catastrophic
- Regulatory requirements (DOSH Certificate of Fitness) create specific compliance obligations
- Underwriting expertise for pressure plant is distinct from general property or machinery underwriting
What Each Policy Excludes for Boilers/PVs
| Policy | What It Covers for Boilers/PVs | What It Excludes |
|---|---|---|
| Fire Insurance | Fire damage TO a boiler from an external fire | Explosion/collapse originating FROM the boiler itself |
| IAR | External accidental damage to a boiler (impact, flood, theft) | Explosion, collapse, or cracking from internal pressure |
| MB | Mechanical breakdown of boiler auxiliaries (pumps, fans, controls) | Explosion or collapse of the pressure-containing vessel itself |
| BPV | Explosion, collapse, cracking, bulging, overheating of the vessel | Fire, flood, theft (covered by property policies) |
The pattern mirrors how MB and Fire divide responsibilities: Fire covers external perils, MB covers internal mechanical faults, and BPV covers the catastrophic failure of pressurised plant. Each has its lane. Without BPV, a boiler explosion leaves you with a gap that no other policy fills.
What BPV Insurance Covers
BPV policies are structured in sections, similar to CAR/EAR. Each section covers a different category of loss from the same triggering event.
BPV Coverage Sections
| Section | What It Covers | Example |
|---|---|---|
| Section I: The insured plant | Repair or replacement of the boiler/pressure vessel itself after explosion, collapse, cracking, bulging, or overheating | Steam boiler tube burst requires complete retubing (RM120,000) |
| Section II: Surrounding property | Damage to nearby buildings, equipment, stock, and other property caused by the boiler/PV failure | Boiler explosion damages adjacent production hall, destroys finished stock (RM500,000) |
| Section III: Third-party liability | Bodily injury or property damage to third parties from the boiler/PV failure | Pressure vessel rupture injures workers in neighbouring unit (RM200,000 claim) |
Insured Causes of Loss
| Cause | Description | Common Equipment Affected |
|---|---|---|
| Explosion | Sudden, violent release of pressure from vessel failure | Steam boilers, LPG vessels, compressed air receivers |
| Collapse / implosion | Inward buckling of vessel walls from vacuum conditions or structural weakness | Storage tanks, vacuum vessels, steam drums during improper shutdown |
| Cracking | Stress cracking, fatigue cracking, or weld failure in pressure-containing components | Heat exchangers, reactor vessels, steam headers |
| Bulging / deformation | Vessel walls deforming under excessive pressure or temperature | Boiler crown plates, pressure vessel end caps |
| Overheating | Damage from temperature exceeding design limits (low water, control failure) | Fire-tube boilers (low water condition), autoclaves |
| Safety valve failure | Pressure relief system malfunction allowing pressure to exceed design limits | Any pressurised vessel with safety valve protection |
Equipment Types Covered by BPV
| Equipment Category | Examples | DOSH CF Required? | Typical Sum Insured |
|---|---|---|---|
| Steam boilers (fire-tube and water-tube) | Package boilers, industrial water-tube boilers, waste heat boilers | Yes | RM200,000 - RM5,000,000 |
| Unfired pressure vessels | Air receivers, LPG vessels, ammonia receivers, process vessels | Yes (above certain thresholds) | RM50,000 - RM2,000,000 |
| Heat exchangers | Shell-and-tube, plate-type, condensers | Depends on pressure/size | RM100,000 - RM3,000,000 |
| Autoclaves | Industrial autoclaves for sterilisation, curing, vulcanisation | Yes | RM150,000 - RM2,000,000 |
| Steam headers and pipework | Main steam headers, high-pressure distribution piping | As part of boiler system | RM50,000 - RM1,000,000 |
| Reactor vessels | Chemical reactors, hydrogenation vessels, polymerisation vessels | Yes | RM500,000 - RM10,000,000 |
| Digesters and sterilisers | Palm oil mill digesters, FFB sterilisers | Yes | RM100,000 - RM1,500,000 |
| Compressed gas storage | LPG storage, industrial gas cylinders (bulk), CO2 systems | Yes (above capacity thresholds) | RM50,000 - RM500,000 |
DOSH Certificate of Fitness and BPV Insurance
In Malaysia, boilers and pressure vessels above certain thresholds must be registered with DOSH (JKKP) and hold a valid Certificate of Fitness (CF). The CF confirms the equipment has been inspected and is safe to operate. But a CF does not cover the financial loss if something goes wrong.
| DOSH Certificate of Fitness | BPV Insurance |
|---|---|
| Confirms equipment is safe to operate at inspection date | Covers financial loss if equipment fails despite being maintained |
| Legally required for registered boilers/PVs | Not legally required, but financially essential |
| Issued by DOSH-approved inspectors | Issued by engineering insurance underwriters |
| Validity: 15 months (standard) or 60 months (SSI scheme) | Annual policy, renewable |
| Covers: regulatory compliance | Covers: repair/replacement, surrounding property, third-party liability, BOLOP |
Having a valid CF does not guarantee your equipment won't fail. Metal fatigue, weld defects, and safety valve malfunctions can occur between inspections. BPV insurance protects you when properly maintained and certified equipment still fails unexpectedly.
Under PUA 99/2024 (Plant Requiring Certificate of Fitness Regulations), all registered boilers and pressure vessels must undergo periodic inspection. The newer SSI 2025 (Special Scheme of Inspection) regulations allow extended 60-month CF validity for qualifying facilities with robust maintenance programmes. Both frameworks focus on prevention. BPV insurance handles the financial consequences when prevention isn't enough.
Who Needs BPV Insurance
| Industry | Typical BPV Equipment | Why BPV Is Essential |
|---|---|---|
| Palm oil mills | Steam boilers, sterilisers, digesters, turbine steam systems | Boilers run at maximum capacity during peak crop season. Failure stops entire mill. |
| Chemical plants | Reactor vessels, heat exchangers, process vessels, storage tanks | Highest consequence industry. CIMAH-regulated facilities with catastrophic failure potential. |
| Rubber and glove factories | Autoclaves (vulcanisation), steam boilers, hot water systems | Autoclaves operate at high pressure/temperature. Malaysia is world's top glove producer. |
| Food & beverage processing | Steam boilers (cooking, sterilisation), autoclaves, pressure cookers | Steam-dependent processes. Boiler failure halts entire production line. |
| Power generation | Water-tube boilers, steam drums, turbine steam systems, HRSG | Highest sum insured. Single boiler replacement can cost RM10M+. |
| Pharmaceutical | Autoclaves (sterilisation), clean steam generators, reactor vessels | GMP-regulated. Equipment replacement requires validation, adding months to downtime. |
| Industrial laundries | Steam boilers, steam presses, hot water systems | 100% steam-dependent. No boiler = no business. |
| General manufacturing | Air receivers, compressed air systems, LPG storage | Even factories without boilers often have air receivers and compressed gas storage that qualify. |
Check whether your facility's pressure plant needs BPV coverage
BPV Premium Factors
BPV premiums are non-tariff in Malaysia. Rates reflect the specific risk profile of your pressure plant.
| Factor | Impact on Premium | What Underwriters Need |
|---|---|---|
| Equipment type and operating pressure | Higher pressure = higher risk = higher rate. Steam boilers attract higher rates than air receivers. | Equipment schedule with design pressure, operating pressure, capacity |
| Age of equipment | Older boilers/PVs attract higher rates. Equipment over 20 years may face restrictions. | Year of manufacture, refurbishment history |
| DOSH Certificate of Fitness status | Valid CF is usually a precondition for cover. Expired CF may void the policy. | Current CF certificates for all insured items |
| Maintenance programme | Regular maintenance and inspection records reduce premium. | Maintenance logs, NDT inspection reports, water treatment records |
| Operator qualification | Certified chargeman operating the boiler demonstrates competence. | Chargeman certificates, operator training records |
| Claims history | 3-5 year loss record. Any previous explosion/collapse claim significantly affects pricing. | Loss summary with causes and amounts |
| Water treatment quality | Poor water treatment causes scaling, corrosion, and boiler tube failure. | Water treatment programme documentation, test results |
| Safety devices | Safety valves, pressure gauges, low-water cutoffs, flame safeguard systems. | Safety device inventory, testing and calibration records |
Indicative BPV Premium Ranges
| Facility Type | BPV Sum Insured Range | Indicative Rate | BOLOP Add-on |
|---|---|---|---|
| Small factory (1-2 package boilers, air receivers) | RM300,000 - RM1,000,000 | 0.15% - 0.35% | 0.08% - 0.20% of GP |
| Food processing plant | RM500,000 - RM3,000,000 | 0.18% - 0.40% | 0.10% - 0.25% of GP |
| Palm oil mill | RM1,000,000 - RM5,000,000 | 0.20% - 0.45% | 0.15% - 0.30% of GP |
| Chemical plant | RM2,000,000 - RM20,000,000 | 0.25% - 0.55% | 0.15% - 0.35% of GP |
| Power plant | RM5,000,000 - RM50,000,000+ | 0.20% - 0.50% | 0.15% - 0.35% of GP |
| Rubber/glove factory (autoclaves) | RM500,000 - RM5,000,000 | 0.20% - 0.40% | 0.12% - 0.25% of GP |
GP = Gross Profit. BOLOP (Boiler Loss of Profits) is the BPV equivalent of MLOP, covering lost profits during repair/replacement of damaged pressure plant.
Standard BPV Exclusions
| Exclusion | Why It's Excluded | Covered By |
|---|---|---|
| Fire damage (external fire destroying the boiler) | Property class peril | Fire insurance / IAR |
| Flood, storm, natural catastrophe | External natural peril | IAR or Fire + Special Perils |
| Mechanical breakdown of auxiliaries | Non-pressure-containing components are MB territory | MB insurance |
| Gradual deterioration / corrosion | Maintenance responsibility, not insurable event | Maintenance budget / water treatment programme |
| Refractory and insulation | Consumable components, not pressure-containing | Maintenance budget (may be negotiable as extension) |
| Loss of contents | BPV covers the vessel, not what's inside it | IAR or stock throughput policy |
| Testing and commissioning failures | Pre-operational testing is contractor's risk | EAR / CAR (during construction phase) |
Note the critical distinction: BPV covers the pressure-containing vessel itself. The boiler's feed pump, draught fan, or control system are mechanical auxiliaries covered under MB insurance. A complete boiler insurance programme typically includes both BPV (for the vessel) and MB (for the auxiliaries).
BPV Claim Scenarios
Scenario 1: Steam Boiler Tube Burst in Food Factory
A food processing plant in Selangor operates a package fire-tube boiler providing steam for cooking and sterilisation. During peak production, a boiler tube fails due to internal corrosion (accelerated by inadequate water treatment). Steam and hot water flood the boiler room.
| Claim Component | Section | Amount |
|---|---|---|
| Boiler retubing (complete tube bundle replacement) | Section I | RM120,000 |
| Boiler room equipment damage (water/steam damage to controls) | Section II | RM45,000 |
| BOLOP: 6 weeks production stoppage (no steam = no production) | BOLOP | RM280,000 |
| Increased working costs (temporary rental boiler) | BOLOP | RM35,000 |
| Total BPV claim | RM480,000 |
The water treatment issue matters. If the insurer can prove the corrosion was gradual and the employer knew about poor water treatment but did nothing, the claim could be contested under the gradual deterioration exclusion. This is why documented water treatment records are both a claims defence and a premium reduction tool.
Scenario 2: Autoclave Door Failure in Rubber Factory
A rubber factory in Klang operates six vulcanisation autoclaves. During a production cycle, one autoclave's locking mechanism fails under pressure. The door opens suddenly, releasing high-pressure steam into the production hall. Two workers suffer severe burns.
| Claim Component | Section | Amount |
|---|---|---|
| Autoclave repair (door mechanism, seals, safety interlocks) | Section I | RM85,000 |
| Surrounding production area damage (steam damage to equipment) | Section II | RM60,000 |
| Third-party claim (burn injuries to 2 workers) | Section III | RM180,000 |
The worker injuries are covered under BPV Section III (third-party liability) for third-party claims and separately under WC insurance for statutory compensation. Both policies respond to the same event from different angles.
Scenario 3: Pressure Vessel Rupture in Chemical Plant
A chemical processing facility in Gebeng operates a high-pressure reactor vessel. A weld defect in the vessel shell propagates under cyclic pressure, causing a catastrophic rupture. Metal fragments damage the control room and two adjacent process units. The facility must shut down for 4 months for DOSH investigation and reconstruction.
| Claim Component | Amount |
|---|---|
| Section I: Reactor vessel replacement (OEM, 16-week lead time) | RM2,500,000 |
| Section II: Control room repair + adjacent unit damage | RM800,000 |
| Section III: Injury claims (workers in blast radius) | RM400,000 |
| BOLOP: 4 months production shutdown | RM6,000,000 |
| Total claim | RM9,700,000 |
This is why chemical plants carry BPV with high limits and always include BOLOP. The physical damage (RM3.7M) is significant, but the lost production (RM6M) is the real cost. For CIMAH-regulated facilities, the DOSH investigation alone can extend downtime by months.
BPV in Your Factory's P&E Programme
| Policy | What It Protects | Loss of Profits Cover |
|---|---|---|
| Fire / IAR | Building, stock, contents against fire/external perils | BI (Business Interruption) |
| MB | Machinery (incl. boiler auxiliaries) against internal faults | MLOP |
| BPV | Boilers and pressure vessels against explosion/collapse | BOLOP |
| EEI | Electronic/IT equipment against all risks | ILOP |
| CGL | Third-party injury/damage from operations | N/A |
| WC | Worker injury/death compensation | N/A |
For a complete boiler installation, you typically need three policies working together: BPV covers the pressure-containing vessel, MB covers the mechanical auxiliaries (feed pumps, fans, controls), and Fire/IAR covers external damage. Combine all three with their profit-loss add-ons (BOLOP, MLOP, BI) and you have comprehensive protection for your steam plant.
Talk to Foundation about structuring BPV within your factory's P&E programme
FAQ
Does my fire insurance cover boiler explosions?
No. Fire insurance explicitly excludes explosion originating from boilers and pressure vessels. Fire covers external fire damage to the boiler (a fire spreading from another area to the boiler room), but not explosion FROM the boiler itself. This is the fundamental coverage gap that BPV insurance fills.
Is BPV insurance mandatory in Malaysia?
BPV insurance is not legally mandatory. But DOSH requires all registered boilers and pressure vessels to hold a valid Certificate of Fitness. The CF covers regulatory compliance; BPV covers financial loss. Many lenders and landlords also require BPV for facilities with pressure plant. For any facility where a boiler explosion could cause millions in damage, the insurance is a financial necessity.
What is BOLOP?
BOLOP stands for Boiler Loss of Profits. It's the equivalent of MLOP for machinery breakdown or BI for fire/IAR. BOLOP covers lost gross profit and increased working costs when a BPV-insured event causes production stoppage. BOLOP can only be purchased as an add-on to the BPV policy, and it only triggers when the BPV claim is accepted.
What's the difference between BPV and MB for boiler equipment?
BPV covers the pressure-containing components: the boiler shell, tubes, headers, pressure vessel body. MB covers the mechanical auxiliaries: feed pumps, draught fans, combustion controls, burner mechanisms. A boiler tube burst is BPV. A feed pump bearing seizure is MB. For complete boiler protection, you need both policies.
Does my DOSH Certificate of Fitness mean I don't need BPV insurance?
No. The CF confirms your equipment was safe at the time of inspection. It doesn't prevent failure between inspections, and it doesn't cover the financial consequences when something goes wrong. Metal fatigue, weld defects, and safety valve malfunctions can develop between CF inspections. BPV covers the financial impact of these events.
What happens if my boiler's CF has expired?
Operating a boiler without a valid CF is a DOSH offence. From an insurance perspective, most BPV policies require a current CF as a condition of cover. If your CF has expired, the insurer may decline a claim on the basis that a policy condition has been breached. Keep your CF current, both for regulatory compliance and insurance validity.
How is the BPV sum insured calculated?
The sum insured should be the replacement value as new of each insured boiler or pressure vessel, including delivery, installation, and commissioning costs. For Section II (surrounding property), the sum insured should reflect the total value of property within the potential blast radius. Underinsurance triggers proportional settlement.
Can BPV cover air receivers and compressed air systems?
Yes. Air receivers are pressure vessels and fall under BPV coverage if they exceed the size/pressure thresholds requiring DOSH registration. Many factories have air receivers that they don't realise qualify for BPV coverage. If your compressed air system operates above certain pressure thresholds, check whether your air receivers should be scheduled on your BPV policy.
What documentation do I need for a BPV claim?
Preserve the failed component for inspection by the engineering loss adjuster. Provide: current CF certificate, maintenance records, water treatment logs (for boilers), safety valve test records, photographs of the damage, incident timeline, and repair quotations from qualified pressure vessel repair firms. Do not repair or dispose of the failed component before the adjuster inspects it.
How often do boiler incidents actually happen in Malaysia?
DOSH investigates multiple boiler and pressure vessel incidents annually across Malaysian industries. Palm oil mills, rubber factories, and food processing plants are particularly affected due to the intensive use of steam systems. Many incidents result from inadequate maintenance, expired safety valves, or poor water treatment. The incidents are less frequent than general machinery breakdowns but far more severe in consequences.
Foundation Conclusion
Every fire, IAR, and MB policy in the Malaysian market excludes the same risk: explosion and collapse of boilers and pressure vessels. If your facility operates any pressurised equipment, BPV insurance is the only policy that covers this gap. A single boiler explosion can generate claims exceeding RM10M when you combine equipment replacement, surrounding property damage, third-party liability, and lost production.
BPV completes the engineering layer of your P&E programme. Combined with MB for auxiliaries and IAR/Fire for external perils, it ensures your pressure plant is fully protected against all failure modes.
Get a BPV quotation for your boilers and pressure vessels
Disclaimer: This article provides general guidance on insurance coverage available in the Malaysian market. Policy terms, conditions, and availability vary by insurer. Always review your specific policy wording or consult a qualified insurance professional before making coverage decisions.
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Foundation Insurance Solutions is a registered and licensed insurance intermediary in Malaysia specialising in property and engineering insurance for industrial operations. We provide comprehensive coverage for manufacturers, contractors, and facility owners across construction, electronics, food production, and high-risk industrial sectors.
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