Insurance Insights: When Machines Fail
Once referred to as “boiler and machinery insurance,” “equipment breakdown insurance” provides coverage in the event that a business’ machinery and equipment should be damaged due to mechanical breakdown, electrical arcing, failure of pressure vessels, and other causes. Equipment breakdown coverage will also cover the loss of business income that is related to the breakdown. This form of insurance is not only critical to the continued well-being of businesses in the manufacturing sector, but any business that has heating/cooling/refrigeration equipment, security systems, generators, elevators, escalators, motors, pumps, ventilation systems, computer-controlled machines, and other equipment upon which it relies for ongoing operation. Standard forms of commercial property insurance typically exclude the losses that equipment breakdown insurance is designed to cover.
Even if you lease your building or use equipment that belongs to others, you still need equipment breakdown insurance. Say you run a restaurant in a leased space, and the electrical panel shorts out. You no longer have heat, air conditioning, lights and refrigerators for a couple of days. Although the building owner is responsible for repairing the panel, you’ve lost customers and income. Equipment breakdown insurance helps you pay for that lost business income. If you have any questions about insurance, please give us a call.
Quick Tip: “Tools and equipment coverage” is intended to protect property such as high-value tools and equipment while in transit, especially useful for contractors and tradespeople.