As you may very well know, insurance policies have exclusions. A standard exclusion in a Commercial Property insurance policy is malfunctions or damages caused by equipment that your business relies on to get products to your customers. If your business is dependent on equipment and it fails to do its job, this can leave your customers disgruntled and your business in a potential hard spot. Whether you have refrigerators to store products, machines that help create your products, or even computer equipment to test products or keep blueprints or other vital documents, Equipment Breakdown insurance is essential coverage for you to consider.
Equipment Breakdown coverage also includes security and fire alarm systems. If you had to close your business due to a crisis or any other event it is important to make sure your security and fire alarm systems are well maintained. In addition, this policy will also cover your business’ air conditioning system by helping you pay for the repairs or replacement of the system in case of, for example, overuse. Sometimes it also includes income or other expense loss.
The equipment breakdown exclusion is a huge gap in coverage for many business owners who are dependent on equipment to be able to produce or store products. Equipment Breakdown insurance was developed to be able to cover this gap and is also known as Boiler and Machinery insurance. When shopping around for this type of policy, make sure to be aware of the inclusions and exclusions to ensure that your specific equipment is covered.
Although you may hear the words Boiler and Machinery, they mean virtually the same as Equipment Breakdown. However, some insurance companies still have the older version of this type of policy that may only cover a steam boiler. The chance that you rely on only this type of equipment is rare. However, the cost to repair a boiler could be devastating financially to your business. Regardless of the type of equipment you need to cover, a policy is crucial to help keep your business running.
Both Equipment Breakdown and Boiler and Machinery insurance policies have some similarities.
Every insurance company will have different coverages within their policies, so it is imperative that you read it and work with an educated agent when you begin to shop around. Most companies, however, have migrated to a standard Equipment Breakdown policy. Some do still have the Boiler and Machinery policy, so just make sure that no matter who you purchase your policy from, the type of equipment you have for your business is what is covered, and not excluded.
It is also important to note that Equipment Breakdown is different from wear and tear. Equipment breakdown covers unexpected events and damages that lead to a sudden stop in the operation of the machinery whereas wear and tear covers damages that occur over time, like rusting and leaking.
Depending on the type of your business and equipment that you need to protect, the cost of Equipment Breakdown insurance can vary. It can vary anywhere from $800-$1,000 or more annually. It is best to get multiple quotes from different companies to compare coverages and pricing. Keep in mind that the cheapest is not always the best, and on the flip side, neither is the most expensive. You need to be sure that the coverage is adequate to protect your business. After all, if you already need to make this investment, make it right. CoverWallet can help you with getting multiple quotes so give us a call today, or check out our website for a fast, no-obligation, quote.