Testing and Commissioning Clause

Purpose

Testing and commissioning phases are technically regarded as particularly loss-prone, since plant components are subjected for the first time to operating conditions (pressure, temperature, load), and latent design or erection defects frequently only become apparent at that stage. The testing and commissioning clause therefore precisely governs when a plant may transfer from construction or erection cover into a subsequent operational policy, by setting out clear, verifiable conditions for the completion of this critical phase.

Effect and limits

Market-standard wordings such as LMA5197A cumulatively require mechanical completion, successful completion of testing and commissioning procedures, and stable, uninterrupted operation of the entire plant at full design output for a minimum period, often 72 hours, before the insured accepts the plant without reservation. During the testing phase itself, the operational policy typically provides no or only limited cover; responsibility remains with the construction or erection policy. Purely routine maintenance and scheduled turnarounds are expressly excluded from the strict attachment conditions.

Negotiation and practice

Because the clause effectively acts as a gatekeeper between construction-phase and operational cover, policyholders on complex plants frequently negotiate phased acceptance for individual sections, together with a clear obligation to declare any deficiencies identified but not yet remedied during the testing phase, in order to avoid coverage gaps at the point of transfer.