Equipment Breakdown Insurance
Boiler Insurance| Machinery Insurance
Broiler Insurance, Machinery Insurance
Equipment Breakdown Insurance
By: Allen Financial Insurance Group
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Equipment Breakdown Insurance & Boiler & Machinery Insurance
Also known as “boiler and machinery” insurance, Coverage for loss due to mechanical or electrical breakdown of nearly any type of equipment, including photocopiers and computers. Coverage applies to the cost to repair or replace the equipment and any other property damaged by the equipment breakdown. Resulting business income and extra expense loss is often covered as well. Equipment breakdown insurance is increasingly replacing traditional boiler and machinery (BM) insurance, in part simply because the title is more descriptive of the coverage provided. Also, today’s equipment breakdown policies typically provide slightly broader coverage than traditional BM policies, and they usually do not use the specialized terminology found in traditional BM policies.It also includes coverage for new technology.
Equipment Failure or Business Failure?
An untimely equipment failure could mean the end of a business. But it doesn’t have to! Allen Financial Insurance Group offers a variety of Boiler & Machinery policies to protect against the expenses associated with an equipment failure.
Our policy offers coverage for direct damage caused by sudden and accidental breakdown of a wide variety of mechanical and electrical equipment that typically is excluded under property policies. Common equipment losses not usually covered by fire or property insurance include:
Gears broken due to misalignment, vibration or inadequate lubrication
Rupture or explosion of steam pressure vessels due to corrosion
Electric motor burnout due to overload or power surge
Explosion of boilers due to metal fatigue
Rupture or bursting of moving or rotating machinery caused by centrifugal force or mechanical breakdown
Electrical arcing of motors, generators, circuit breakers, electrical distribution boards, cables and transformers
Short circuits and line surges resulting in physical damage
Explosion of steam boilers, pipes, turbines, engines and gas turbines.
In addition to direct damage exposures, equipment failures can result in substantial business interruption, extra expense or spoilage losses. Coverage for such losses can be added to a policy.
Allen Financial offers fast quotes and policy issuance, competitive premiums, useful risk evaluation, quick and equitable claim settlement and timely inspections.
How Is This Different from Warranties or Service Contracts?
Warranties and service contracts are important but they don’t cover many of the common causes of equipment breakdowns. Maintenance contracts cover routine service such as cleaning or adjustment. But they don’t pay for damage due to operator error, the cause of over 35% of equipment breakdowns. Equipment breakdown insurance does. Warranties and maintenance contracts also don’t pay for business interruption or income loss resulting from breakdown. Nor do they pay for spoilage, damage to surrounding property or extra expenses to restore operations. Equipment breakdown insurance can cover all these risks.
I’m a Tenant, Do I Need It?
You don’t have to own a building to face an equipment breakdown risk. If you are a tenant you still have equipment such as phone systems, fax machines, computers, air conditioners and an electrical system. These types of equipment do fail and even a modest loss can be painful to a business. Your lease may also make you responsible for other equipment that services your premises. Lastly, your operations and income are dependent upon equipment of others. If the electrical, heating or cooling system of your landlord broke down, the interruption of those services can impact you. The right equipment breakdown coverage can protect you in this contingency.
EQUIPMENT BREAKDOWN INSURANCE FAQ
(FREQUENTLY ASKED QUESTIONS)
Equipment Breakdown Insurance works a lot like other types of commercial insurance. But when some people hear the old phrase “boiler and machinery” they think they have to be an engineer to understand it. Actually, it’s pretty simple. These FAQs will be helpful if you’re just getting started.
What Is Equipment Breakdown Insurance?
Equipment Breakdown Insurance pays for financial loss incurred when equipment breaks down suddenly and accidentally. Equipment is subject to unique hazards such as power surges, short circuits, centrifugal force, motor burnout, and mechanical breakdown. Equipment breakdown insurance covers equipment accidents from these risks of loss.
What Does It Pay for?
It pays the cost to repair or replace damaged equipment. It can also cover business income losses and the costs you incur to speed restoration of business operations when breakdown interrupts your operations. Many of our customers buy spoilage coverage to protect substantial values of perishable goods that spoil as a consequence of a breakdown.
Why Do I Need Equipment Breakdown Coverage?
Because the costs of breakdown can be significant and these breakdowns occur often enough for there to be a legitimate risk to your organization’s financial health or to the profits of your business.
Who Needs It?
If your business or organization owns, operates or depends upon some type of equipment to generate revenue, you need equipment breakdown insurance. Do you use electricity?
Do you heat, cool or refrigerate your premises? Do you have communication networks? Do you manufacture or process goods? Do you use equipment to sell, deliver service or help you keep track of sales? Do you use a lot of hot water? If so, you need equipment breakdown insurance.
Doesn’t Business Property Insurance Already Cover This?
Property insurance covers many standard perils, such as fire. But even “all risk” property coverage wasn’t designed to pay for equipment accidents from the unique causes of equipment failure such as short circuits, centrifugal force or mechanical breakdown. Equipment breakdown coverage is specially designed to pay for damage caused by these risks. Because standard property policies don’t cover equipment breakdown you need to ask to make sure it is included.
I Don’t Have a Boiler, Why Do I Need It?
Equipment breakdown covers many types of equipment. It protects electrical systems, air conditioning and refrigeration, mechanical equipment, modern office equipment in addition to heating systems such as boilers. That’s why “Equipment Breakdown Insurance” is a better description than “Boiler and Machinery Insurance.”