Why You Need Equipment Breakdown Insurance for Your Business

Businesses, institutions, and municipalities are increasingly relying on costly equipment and new technologies. Whether it's electrical distribution, production machinery, environmental controls, refrigeration, or computers, equipment is vital to your operations. Reliance on new technologies and equipment has actually led to a greater probability that a critical business system will fail. This results in unbudgeted losses that can be extremely costly and, in many cases, greatly impact your bottom line.

Some types of equipment subject to Equipment Breakdown include:

  • Electrical Distribution Systems. Maximum power uptime is important for any business, institution, or municipality. The loss of power can mean the loss of income and customers. Since the panels, circuit breakers, and cables in your power distribution are all interconnected, a short circuit in one part can spread instantly to other parts of the system. The cause can be as simple as a loose connection, dust, or high humidity.
  • Heating and Cooling Systems. Today's HVAC systems are more complex and costly to repair. Failures are common and can cost tens of thousands of dollars. If the climate becomes inhospitable due to lack of heating or air conditioning, there is loss of productivity and loss of income if you service customers on site.
  • Telephone Systems. If your phone goes down, so does your business. Phones have a circuitry that is easily affected by voltage spikes, heat, vibration, and moisture.
  • Electronic Equipment. Virtually every business, institution, or municipality depends on electronics, especially computers. Whether you're designing and manufacturing high technology components, tracking productivity data, or using them for bookkeeping, computers rely on highly sensitive and fragile technologies. They contain circuitry that is vulnerable to damage.
  • Refrigeration. If your business depends on refrigeration, a breakdown can cause more than the loss of a major equipment investment, it could also mean the loss of costly perishable goods and business income. Not to mention the cost of the refrigerant you'd have to replace.

Equipment Breakdown coverage helps protect you from the costs associated with these types of losses to your facility's equipment. Coverage can include:

  • Direct property loss – the cost to repair or replace the damaged equipment.
  • Costs associated with the time and labor to repair or replace the equipment.
  • Other expenses incurred to limit the loss or speed the business restoration.
  • The loss value of spoiled products or materials.
  • Business recovery expenses.

It can also provide coverage for damages caused by:

  • Short circuits/electrical arcing
  • Power surges
  • Mechanical breakdown
  • Motor burnout
  • Boiler damage
  • Operator error

Equipment Breakdown insurance covers the physical damage – and the financial damage – that stems from an insured equipment failure. It's bottom-line protection that is essential for today's technology-intensive businesses. For more information about Equipment Breakdown Insurance, contact your independent agent.