Does the insurance policy covering your business, organization or church have coverage for Equipment Breakdown? If you are unsure, pull out that policy today. Equipment breakdown coverage is one of the most important coverages that can be added to your policy. Below are just five of the reasons why I recommend it:
1. Equipment You Depend On
Your business may depend on many types of equipment like:
-
- Electrical Equipment
- Mechanical Equipment
- Business Equipment
- Refrigeration
- Heating & Cooling Systems
- Computers or Electronic Data Processing Equipment
This equipment is subject to sudden and accidental breakdown.
2. Complements Your Property Insurance
Typical property insurance covers equipment for standard perils, such as fire, but excludes losses due to:
- Mechanical Breakdown
- Electrical Surge
- Damage to Steam Boilers & Hot Water Heaters
By adding equipment breakdown coverage to your policy, you now have coverage for these hazards.
3. Equipment Breakdown Insurance Covers More Than Just Repair Costs
Equipment Breakdown insurance helps protect you from the costs associated with losses to your building’s equipment. It pays for:
- Cost to repair or replace equipment damaged by breakdown
- Other costs or expenses to limit the loss or speed business restoration
- Loss of business income due to an “accident”
4. Losses Can Be Costly
When equipment fails, it often leads to a variety of unanticipated expenses. To assess the value of Equipment Breakdown insurance, consider the following costs:
- Investment in electrical equipment and machinery
- Income for the period you have to shut or slow down because a breakdown interrupts business
- Extra expenses you may incur to rent spares or rush repairs.
It adds up, doesn’t it? Considering what’s at stake, every business needs Equipment Breakdown Coverage. Keep reading for examples of loss payments.
5. What’s More Likely: Equipment Failure…Or A Fire?
Ask yourself: What is more likely: a power surge that damages electrical distribution equipment or a major fire. Shouldn’t you insure for what is more likely to occur?
Below are a few examples where Equipment Breakdown coverage stepped in to cover a loss.
- Retail Store: Electrical arcing occurred from an electrical surge, which damaged a transformer supplying power to a store. A rental transformer was installed while repairs were made.
Total Paid Loss: $52,279
- Office: The 400 HP motor of an office building’s roof top air conditioning unit shorted out, causing damage to the motor, bearings and impeller. A rental air conditioning unit was installed to avert a business interruption loss while the damaged unit was replaced.
Total Paid Loss: $122,206
- Restaurant: A power surge damaged a restaurant’s refrigeration compressor motor, computer and point-of-sale system. The insured lost data including the insured’s website customer info, mapping for deliveries and recipes because of the event that had to be restored on the replacement equipment.
Total Paid Loss: $57,160
- Auto Services: A valve on an air compressor pump breaks while the air compressor is running. The pressure causes oil to spew out in a mist, covering everything.
Total Paid Loss: $20,849
- Retail: A retail store lost power. Once power is restored, it is discovered that all of the point-of-sale registers and phone system had lost functionality. Rebooting the system does not work. The repair company was unable to get the system to reboot and found no physical damage. However, one of the disks was replaced and the systems immediately began working.
Total Paid Loss: $14,000
Bottom-line, if any of these scenarios resonates with you, it is a good idea to check your current insurance policy for Equipment Breakdown coverage. I am always happy to answer questions if you have one.
– Martin Caton, Producer
731-288-1600
martin.caton@whiteins.net