Equipment Breakdown: Time is Money

In the world of business, time is money. Consider the impact your business would face if even one piece of equipment essential to daily operation failed. In many scenarios, your operations would be immediately interrupted. Do you have backup equipment at the ready? Do you have another facility at your disposal? Are you prepared to cover the extra expense of equipment rental or expedited repair services? These are not practical, or even feasible, solutions for most business owners. To avoid a loss in time that results in a loss of money, Equipment Breakdown coverage is vital.

Many business owners are under the assumption that this type of loss is covered under their standard commercial property policy. While your typical property policy can provide coverage for the structure and contents, Equipment Breakdown is excluded. Equipment Breakdown coverage, often added by endorsement, bridges the gap by providing coverage for the physical damage to equipment and resulting loss of revenue from sudden and accidental failure. It is important to note, however, that this coverage does not pay for normal wear and tear or lack of maintenance.

With just over a month until summer is officially here, air conditioning units should be at the top of your equipment maintenance checklist. Delayed maintenance could result in the inability to identify potential problems before they occur. The middle of an August heat wave is the worst time to learn that a lack of preparation could result in a lack of coverage.

Additional categories covered by Equipment Breakdown insurance:

1. Electrical
2. Refrigeration
3. Boiler and Pressure Vessel
4. Computer and Communications
5. Mechanical
6. Renewal and Alternative Energy
7. Production Systems

In-House Claim Examples:

• A brewery had a trap-door blow off of a fermenting vat during the brewing process. Beer was shot in all directions, resulting in a blown out window and damage to surrounding walls and ceilings. In addition to the damage, the insured experienced loss of product, loss of time, and loss of business. Because of the brewery’s Equipment Breakdown coverage, nearly half of this $23,000 claim was paid.

• The malfunctioning of a restaurant’s cooler resulted in the disposal of the cooler’s contents.  They did not receive inventory for several days and were forced to shut down the restaurant during this time. Thanks to the forethought of the restaurant owner, close to $2,000 of this $11,500 claim was paid under their Equipment Breakdown coverage.

Hausmann-Johnson Insurance has a team of Commercial Consultants ready to provide tailored coverage options for the equipment and systems installed at your property. Contact our agency today for more information.