Equipment Breakdown Insurance

On Point.

Equipment Breakdown Insurance protects the equipment your business depends on from sudden and accidental, physical damage to the equipment that requires its repair or replacement.

Equipment Breakdown Insurance

The Blindspot

Consider the impact on your business of equipment failure, your operations are immediately affected. Many business owners think their property policy provides equipment breakdown insurance, but that is not correct. Equipment failure may interrupt your work or in the case of extensive loss, shut your business down.

Equipment Breakdown Insurance

The Solution

Equipment breakdown insurance can help protect your business. When equipment breaks down, this coverage, also known as boiler and machinery coverage, steps in to cover the repair or replacement of equipment in the following categories:

Electrical
Mechanical
Boiler and pressure vessels
Air conditioning and refrigeration
Computer and communications

Review the extents of your coverage today

Your equipment is undoubtedly expensive, and would take a great deal to replace if you had to. Since electrical equipment often represents at least 15% of your building’s value, failures in this equipment can quickly add up.

Which business are you?

Schedule a Commercial Insurance Review

Discuss with your Excalibur commercial insurance expert if you have any concerns or questions about the coverage being offered. We can help tailor a Crime Insurance & Employee Dishonesty Coverage policy for your business’ needs.

Equipment Breakdown Insurance provides protection to:

Air conditioning and refrigeration
Electrical equipment
Computers and telecommunications
Business equipment
Production machinery
Computer-controlled machines
Security systems
Retail “point of-sale” systems

Ventilation systems
Generators
Elevators and escalators
Boilers
Hot water heaters
Motors and pumps
Engines

It’s important to know that the protection offered extends to business interruption, spoilage, property damage and impact of the breakdown, not exclusively the damage or repair itself. The wealth and success of your business is worth protecting.

Can you give me a few examples
of ‘coverage’ in action?

1

A power surge causes the burnout of circuits in your phone system throughout your call centre. Property damage is close to $12,000 and your business interruption is easily another $6,000. Equipment Breakdown coverage steps in to ensure you don’t pay these expenses out of pocket.

2

Your machine operator enters the wrong code into the CNC lathe and causes damage to the chuck. Repairs are delayed by supply chain issues and the total loss approaches $40,000. Equipment breakdown insurance ensure this loss doesn’t eat into your bottom line.

3

Your design studio experiences a power surge that burns out your computer circuit boards. You lose a valuable computer and a day of work. Equipment Breakdown insurance helps soften the $3000 dollar blow.

Frequently Asked Equipment Breakdown Insurance Questions

Your business offers unique services and as such your tools and coverage needs can vary. These frequently asked questions might help you understand more about Equipment Breakdown Insurance. When we advise business owners on breakdown insurance, we consider the specific industries in which they operate and the items that can malfunction. A few examples of business sectors impacted by equipment failure include:

Restaurants
Medical Practices

Automotive Repair
Manufacturers

Farms / Agricultural

Excalibur Insurance can help you secure Equipment Breakdown Insurance solutions to best meet your needs. Schedule a consultation with us today.

What is Equipment Breakdown Insurance & Why Do I Need It?

In short, “Equipment Breakdown Insurance” or “Machinery Breakdown” is coverage for your tools and equipment as a result of an unexpected or accidental malfunction or breakdown which does not have insurance ordinarily under a regular commercial policy. Equipment Breakdown Insurance offers coverage for property damage, business interruption – as long as it is included in your existing commercial plan – and equipment or inventory damaged by power surges and similar events.

What can be insured by Equipment Breakdown Insurance?

Most machinery and equipment can be insured under an Equipment Breakdown plan, including anything electrical, electronic, mechanical, or pressurized systems – including boilers, air conditioning and heating systems, and electrical systems, computers, telephone systems, etc. Some businesses that utilize production machines such as anything that conveys production or maintenance (mills, paper machines, presses, lathes, etc.) may require additional coverage.

What is covered by Equipment Breakdown Insurance?

Equipment Breakdown Insurance will cover your equipment, machinery, and tools should there be an unexpected breakdown as a result of an internal cause, including the following:

Mechanical/electrical breakdown
Explosion from pressure vessels
Explosion damage from piping steam, pressurized water, or piping steam

Your Commercial Property Insurance should technically cover your equipment and machinery from external damages, such as flood, fire, or other weather-related events. However, they will not cover your equipment from internal causes – which is why you need Equipment Breakdown Insurance.

Does Equipment Breakdown Insurance have any exclusions?

Like any insurance policy, Equipment Breakdown Insurance contains a number of exclusions that you may wish to familiarize yourself with. Equipment Breakdown Insurance covers equipment, tools, and inventory when they breakdown accidentally or unexpectedly, but note that newer appliances will have warranties to cover them for a certain period of time. Equipment Breakdown Insurance will not cover damage to items that is caused by gradual wear and tear, old age, rust, mould, infestation, or any issues that come as a result of lack of maintenance.

How much does Equipment Breakdown Insurance cost?

Equipment Breakdown Insurance is a necessary expense for you and your business – what would you do without your tools and inventory? The amount you will pay for your Equipment Breakdown Insurance may depend on the overall cost of your equipment. It will also vary depending on the insurance industry that you work in, the total value of your equipment, your claims’ history, and the type of machinery/equipment that you own. These are only a few factors. Talk with an insurance broker if you have any concerns about cost.

Who needs Equipment Breakdown Insurance?

Any business or commercial enterprise that utilizes equipment or machinery should have Machinery Breakdown Insurance, including the following:

Restaurants
Electricians
Contractors
Retail stores
Landscapers
Manufacturers
Farmers

This is just a small sampling of some of the businesses that may benefit from Equipment Breakdown Insurance. If you feel that your business uses machinery or equipment that is beneficial – or even critical – to its operation, then you should inquire about Equipment Breakdown Insurance.

What is the difference between Equipment Breakdown and Contents Insurance?

Contents Coverage is designed to protect property as a result of external sources, such as water damage, fire, or natural disaster. This does not include coverage for unexpected breakdown or internal explosion – basically anything “inside.” Most spontaneous mechanical or electrical breakdown will not be covered by a Contents coverage policy, but an Equipment Breakdown Insurance policy may.

The bottom line

Even if you already have a warranty policy for your equipment – which you likely do on many pieces of equipment and machinery – there are special situations that will not be covered. Some warranties come with equipment without needing special purchase, so read those carefully. They also generally do not cover operator error, so if an employee damaged your equipment unintentionally it would not be covered. Even if you have warranty, it is important to still have Equipment Breakdown to cover the gaps!

Our tools and our equipment are critical to the work that we do. Expecting us to work without them is like expecting them to work without us! Discuss with an insurance broker today to talk about Equipment Breakdown Insurance and how it can help you and your business’ peace of mind.

Schedule a Commercial Insurance Review

Finding the right policy for your Business

Equipment Breakdown insurance is an essential coverage for your business and can mean a huge difference between being forced out of business due to an unexpected issue and being able to continue work without a hitch.

Before you purchase a policy, discuss with an Excalibur Insurance commercial broker– to see if the tools and equipment that your business needs qualify for Equipment Breakdown Insurance and what kind of coverage you need to ensure your business has that adequate layer of protection.

Speak to your Excalibur Insurance agent about developing the best coverage package for your unique business needs.