Equipment Breakdown Coverage
When it comes to Equipment Breakdown Coverage, there are two primary questions that you need to ask. The first is whether your property has an exposure to equipment breakdown and second, whether you currently have coverage in place for this potential exposure.
If your property has any of the following equipment then you definitely have an exposure to loss:
- Electrical: Equipment used for the generation, transmission or utilization of electrical power. Components may include panels, cables and transformers.
- Mechanical: Any equipment used for generation, transmission or utilization of mechanical power. Examples include elevator and escalator motors, water pumps and motors, ventilation fans and combustion engines.
- Air Conditioning and Refrigeration units: These systems contain a variety of pressure vessel, mechanical, and electronic equipment.
- Computer & Communications equipment: These include network, telephone, point of sale, fire and burglar alarm systems. Today’s technology contains highly sensitive and sophisticated electronics that can be vulnerable to power surges, for example.
- Boiler and Pressure Vessels: Equipment that operates under high internal pressure and includes vessels used for heat, hot water, steam production and processing.
Virtually all businesses have equipment mentioned above, so you need to consider the financial risks should any of this equipment fail. Not only is there the cost to repair or replace the faulty equipment, but also the additional expenses and lost revenue incurred as a result of the breakdown. If you don’t have a backup unit, will an order be cancelled? Will the business be shut down? Will you have to find alternative facilities for your tenants? These are important questions to consider.
Equipment breakdown coverage fills this gap by providing insurance to cover the sudden and accidental, physical damage that requires its repair or replacement. The policy can also provide coverage for the loss of revenue associated with the equipment breakdown loss.
It is important that you speak with your insurance broker to make sure that you have the proper insurance coverages in place. Doing so will help protect your bottom line and provide peace of mind.