FREQUENTLY ASKED QUESTIONS

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, boiler overheating or cracking, 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 equipment damaged by a covered accident. It can also cover business income losses that stem from an equipment breakdown and the additional costs you incur to speed restoration of business operations. Perishable goods coverage is also available to protect the value of foodstuffs or other materials that spoil as a consequence of a breakdown.

Why Do I Need Equipment Breakdown Coverage?
The costs of an equipment 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 depend upon telecommunication equipment to service customers? Do you use equipment to sell, deliver service or help you keep track of sales? Do you manufacture or process goods? Do you use 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 make sure it is included.

I Don't Have a Boiler, Why Do I Need It?
Our equipment breakdown insurance is among the broadest available and covers many types of equipment. We can protect electrical systems, air conditioning and refrigeration, computers, telecommunications, mechanical equipment, security and fire detection systems, diagnostic equipment, inventory control systems, fired hot water heaters, and more in addition to heating systems such as boilers. That's why "Equipment Breakdown Insurance" is a better description than "Boiler and Machinery Insurance."

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 / 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.

Do you inspect boilers or pressure vessels?
Yes we do. Periodic inspections of boilers and pressure vessels are required in most states, municipalities and other jurisdictions. These are called “jurisdictional inspections” and we offer this service as part of our insurance policy. (Not all insurers will do these required inspections or they charge extra for it.) Inspections are performed by certified professionals of The Hartford Steam Boiler Inspection and Insurance Company, the leading company in this field.

What should my limit be for equipment breakdown insurance?
Equipment breakdown insurance limits are commonly equal to the total property limits. This is because the destructive potential of some equipment, notably boilers, pressure vessels and some water heaters, has enough power to flatten an entire building. For this reason, it’s wise to select a limit equal to the total insurable value of the building.

Is There Anything That Isn’t Covered?
We cover most types of equipment for sudden and accidental equipment breakdowns but there are some things that equipment breakdown insurance is not designed to cover. These include:

War
Aircraft
Floating vessels
Routine and normal maintenance
Mobile equipment such as backhoes or bulldozers
Vehicles such as cars and trucks
Non-functioning of a safety device
Domestic water piping or sewer piping
Perils covered by your property insurance such as fire, lightning, windstorm, etc…


Contact us today for a quick and easy consultation and insurance quote.