Equipment Breakdown Insurance

Numerous property owners are under the assumption that the property policies include coverage for equipment that is installed in their buildings. Unfortunately, there are considerable gaps within most standard property policies which can only be closed by adding "equipment breakdown" coverage. This insurance is commonly written under a separate policy and occasionally can be accommodated by endorsement to property forms.

Because equipment breakdown insurance ranks high among the more exotic and frequently misunderstood property and casualty coverages, it is often not adequately addressed in insurance programs. Still this coverage is too important to ignore in planning a comprehensive insurance program because not only does such coverage provide broad valuable protection, it complements a carefully thought-out commercial property insurance master-plan to help ensure that your business or organization survives and continues after a major loss.

You are under a misconception that your property policies include coverage for equipment installed unless you have addressed an Equipment Breakdown Coverage to keep the following protected:

ELECTRICAL SYSTEMS

Electrical systems, which can account for up to 30% of your building valuation, are a must to your normal operations. Interconnected to the system are transformers to the electrical panels, wiring to which short circuit can spread causing extensive damage. Want the damage repaid, a temporary generator to keep production online or possibly even relocate tenants?

ELECTRONIC TECHNOLOGY SYSTEMS

Coverage caused by a power surge to sensitive electronic equipment such as computers, phone systems, satellite systems, security or fire alarms or just about anything that relies upon electronic technology. Would a surge protector be adequate?

AIR CONDITIONING AND REFRIGERATION

Sudden breakdown in air conditioning or refrigerating units may cause you to close the doors, spoilage issues and revenue loss for you or a tenant and what about those expensive repairs.

BOILER AND MACHINERY

Required inspections and state/city filings are automatically provided by the company with equipment breakdown insurance. The exposures of boilers or pressure vessels to cracking, explosion, bulging or collapsing can result in loss of hot water or heat to a building causing equipment repair or replacement or possibly require temporary arranging substitute equipment to be brought in.

MECHANICAL EQUIPMENT

Elevators, escalators, water pumps, motors, engines, ventilation fans and most other mechanical equipment used to run the building are included in equipment breakdown insurance.

EQUIPMENT BREAKDOWN COVERAGE

This insurance covers damage to insured equipment and resulting loss of revenue (business income) while the equipment is being repaired or replaced. Losses such as power surges, short circuits and mechanical breakdown are the primary culprits. Coverage is not provided for normal wear and tear.

Most property and casualty insurance expenses are payment of losses and claim expenses, although with the equipment breakdown insurance, if the inspection services are done properly and following up to assure the correction of hazards, the largest cost factor is the underwriting, inspection and loss prevention services.

Without and Equipment Breakdown policy, owners are self-insuring substantial loss exposures to their property. If Equipment Breakdown coverage is not included in your current property insurance program, we will be happy to discuss coverage options with you.