Don’t Get Caught Off Guard: Understanding Equipment Breakdown Coverage

Here at Hitchings Insurance, we know your business relies on a lot of equipment to run smoothly. From computers and printers to specialized machinery and HVAC systems, these are all essential for daily operations. But what happens when they break down?

While standard business insurance protects against many risks, it typically doesn’t cover the repair or replacement costs associated with equipment failure. That’s where Equipment Breakdown Coverage (EBC) comes in – a valuable add-on that can provide peace of mind and financial protection.

What is Equipment Breakdown Coverage?

Think of EBC as a safety net for your essential business equipment. It helps cover the cost of repairs or replacements if your machinery or systems experience a mechanical or electrical breakdown due to a sudden and accidental breakdown of the insured equipment.

• Electrical Surges/Arching: Power fluctuations can damage sensitive electronic components. EBC can help offset the costs associated with repairs or replacements due to these unexpected events.
• Pressure or Vacuum Equipment Failure: For example, carbon can build up in a boiler causing the elements to overheat, which ultimately causes the equipment to fail.
• Boiler & Pressure Vessel Mishap: Rupturing of a pipe can cause hot water or steam to damage inventory on or near the equipment or the equipment itself.  These are losses caused by centrifugal force or other mechanical failures.

Covered Equipment:

• Communication Equipment
• Computer Equipment
• Equipment that is electrical or mechanical used to generate, transmit, or use energy (electric).
• Equipment designed and used to operate under internal pressure or in a vacuum.

Exclusions:

• War
• Nuclear Energy
• Ordinance of Law
• Mudflow
• Flood
• Earth Movement
• Wear and Tear
• Neglect
• Errors and Omission (intentional)
• Accident to any object while being tested
• Water Backup
• Indirect Losses
• Combustion or Fire outside of the insured object (coverage could apply on property form for these).

Is Equipment Breakdown Coverage Right for My Business?

The answer depends on your specific needs. Here are some factors to consider:

• The value of your equipment: If you rely on expensive machinery or specialized systems, EBC can provide much-needed financial protection in case of a breakdown.
• The risk of downtime: If a breakdown significantly disrupts your business operations, EBC can help minimize financial losses associated with lost productivity.
• Your existing warranties: If your equipment is still under the manufacturer’s warranty, you might have some coverage for breakdowns. However, EBC can provide additional protection after the warranty expires.

Benefits of Having Equipment Breakdown Coverage

By adding EBC to your business insurance policy, you can enjoy several key advantages:

• Peace of mind: Knowing you have financial protection for unexpected equipment failures can alleviate stress and allow you to focus on running your business.
• Reduced financial burden: EBC can help you avoid significant out-of-pocket expenses for repairs or replacements.
• Minimized downtime: By expediting repairs or replacements through EBC, you can get your equipment back up and running faster, reducing the impact on your business operations.
• Expediting expenses: Pays for extra costs that are incurred to make emergency repairs and then pays for the extra costs for the permanent repair or replacement of the damaged equipment. Example: If a new boiler takes 3 months to be delivered but another vendor has the same unit in stock but the cost is 25% more, the expediting expense coverage will pay for the additional costs to get the repair made quicker to get the insured’s operation running again.

Getting Started with Equipment Breakdown Coverage

Our team at Hitchings Insurance is here to help you determine if EBC is the right fit for your business. We’ll discuss your specific needs, assess your equipment, and work with you to find a customized EBC policy that provides optimal coverage at an affordable rate. Remember, just like preventive maintenance keeps your equipment running smoothly, EBC serves as a preventative measure against unexpected financial losses.

Contact Hitchings Insurance today for a free consultation, and let’s discuss how EBC can add an extra layer of protection to your business!