Boiler and Machinery Insurance

Equipment Breakdown Insurance

Why do I need equipment breakdown insurance?

Equipment Breakdown insurance provides coverage for the accidental breakdown of equipment. This type of coverage is different from property or insurance for businesses.

Your property coverage would cover property damage in the event of a fire. But what covers your production equipment?  
The answer is "Boiler and Machinery" or "Equipment Breakdown Insurance".

Call Clover and speak to an agent who will go over your business and options.

“Property/casualty policies only cover damages to your equipment from “external” causes, such as a fire, a flood, hail, windstorm, and earthquake. Property/casualty policies do not cover damage from “internal” causes such as mechanical failure of the equipment, electrical short circuit, motor burnout, centrifugal force, a boiler overheating or cracking, and mechanical breakdown. Coverage for these types of losses requires a “Boiler and Machinery” insurance policy.”

Why do I need machinery breakdown insurance?

Equipment Breakdown insurance is a critical component of all small business insurance packages.

Breakdown coverage not only provides protection for electrical system failures, but it also provides coverage for air conditioning and refrigeration systems, telecommunications, mechanical equipment, security and fire detection systems, diagnostic equipment, inventory control systems, computer system, fired hot water heaters and boilers.

The cost of a breakdown in today's world can be even more expensive than ever. Business and speed of business means every minute you are down can cost you dearly.  Online delivery systems, on-site computer systems, even mobile equipment being stolen or damaged. Being covered would mean getting it fixed, replaced and repaired FAST.

Review all your risk exposures carefully and consult your Clover insurance broker to determine if optional insurance protection is available to meet these needs.

Does equipment breakdown insurance cover me if my software gets a virus?

No. Damage or downtime from virus is NOT coverd. But you can speak to your broker about Cyber Insurance.
Equipment or mechanical breakdown insurance policies are for “hardware” insurance, and is not “software” insurance. That means that if your production equipment or computers suffer some sort of physical damage, equipment breakdown insurance will cover that.

Can I buy coverage for loss of income due to production or other equipment failure?

Yes. However, this is not usually covered under an “equipment breakdown” policy. Protection against loss of income due to equipment breakdown requires coverage called “business interruption” or “service interruption.”

Similarly, there is perishable goods coverage (consequential loss) to protect the value of foodstuffs or other materials that spoil as a consequence of a breakdown.

What about warranties? Why do I need equipment breakdown insurance?

Although warranties and service contracts provide some protection, they do not cover many of the common causes of equipment breakdowns. For example, typical maintenance contracts cover routine service such as periodic calibrations and other adjustments, and possibly cleaning, etc. However, such contracts do not pay for damages due to operator error, for example. Your equipment breakdown policy does cover such losses. Likewise, warranties and maintenance contracts do not pay for loss of income that results from equipment breakdown; nor do they pay for spoilage, damage to surrounding property or extra expenses to restore operations. Buying equipment breakdown insurance is critical as it covers all of these risks.

I don’t own the building, so why do I still need equipment breakdown coverage?

As a tenant you may not be responsible for the building’s electrical, air conditioning or heating systems, but it is important to check your lease to be sure you are not responsible for the equipment that services your premises. If you are not responsible for these systems, your business operations and income are still 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. So, getting the right equipment breakdown coverage is essential to protect you even in contingencies like this.

Okay, so how much boiler & machinery insurance should I buy?

Each business is unique and so your equipment breakdown insurance should be tailored to your precise needs. For example, if the destructive potential of some of your equipment is low, (contrast this with equipment such as boilers, pressure vessels and some water heaters, which can produce enough power to damage huge sections of the building), then less coverage would be needed.

Talk to a Clover Broker today. 

• Assess the risk potential for equipment breakdown
• Determine the precise insurance coverage you need for your business