Is it a code violation violation? If so as a professional did you explain why? Who ever authorized the installation either didn't have a clue what was required either going with a handyman that claims that they knew what they were doing or went with the cheepest price as providing correct motor protection doesn't come cheep.
Any noncompliant installation may work forever without incident but without providing adaquate protection there is an issue should a failure occur. A good example is a simple replacement breaker purchased from a second hand market which has never been retested and certified for factory calibration that may turn on and off just fine but will not automatically trip if it actually was require to protect?
I'm sure that the insurance company would raise this issue should there be a claim for loss filed against them.
Most of the time the only loss is the motor. Maybe depending on details there is secondary loss of product being handled by the motor, though those losses could occur if a proper motor overload shuts the process down as well.
If it is a 10 HP or less motor the loss of the motor usually isn't an insurance issue - it probably doesn't even exceed any deductibles that need paid before coverage kicks in.
I'm not advocating that we shouldn't provide overload protection, after all there is a lot of protection installed but mis-applied and motors burn out anyway. Also is a lot of protection properly installed at first, then a user got tired of it cutting out and cranked up the setting, bypassed it, etc., then they ask what caused the motor to burn out.
