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Breakdown Of Electrical & Mechanical
Equipment Must Be Insured Properly
By: Thomas M Kallman
If you have electricity, you need Boiler & Machinery
coverage. Property policies don't cover certain types of losses
such as those resulting from electrical arcing, mechanical breakdown,
or a ruptured boiler.
Equipment breakdown insurance, commonly referred to
as boiler and machinery insurance covers the physical and financial
damage that can result from an equipment breakdown. Equipment breakdown
insurance often pays for direct property loss meaning the cost to
repair or replace damaged equipment, lost business income and costs
for temporary replacement equipment, other expenses incurred to
limit the loss or speed restoration of operations, the lost value
of spoiled products or materials as well as business recovery expenses.
Most property policies exclude the very losses that
equipment breakdown insurance is designed to cover.
These special policies provide the following additional
layers of coverage:
- Mechanical breakdown
- Electrical arcing
- Artificially generated electrical currents
- Centrifugal force
- Boiler overheating, cracking, bulging, sagging
- Bulging, cracking or collapse of pressure vessels
- Broad definition of equipment, including the following:
- Boilers, pressure vessels, water heaters
- Electrical distribution systems
- Heating and cooling systems
- Refrigeration (including lost refrigerant)
- Production equipment
- Office equipment
- Computer technology
- Communications systems, including phone and voice-mail
systems
- Security and fire detection systems
- Ovens, stoves, furnaces
- Elevators, escalators, cranes, hoists and lifts
- Cash registers and inventory control systems
- Diagnostic equipment
Keep in mind that mechanical breakdown coverage encompasses
much more than just boilers and pressure vessels. It also can include
refrigeration equipment, air conditioning equipment, various types
of piping, turbines, engines, pumps, compressors, blowers, gearing,
shafting, electric motors, generators, transformers and assorted
other types of mechanical and electrical equipment.
Warranties and service contracts are important but
they don't cover many of the common causes of equipment breakdowns.
Maintenance contracts cover routine service such as cleaning or
adjustment. But they don't pay for damage due to operator error,
the cause of over 35% of equipment breakdowns. Equipment breakdown
insurance does. Warranties and maintenance contracts also don't
pay for business interruption or income loss resulting from breakdown.
Nor do they pay for spoilage, damage to surrounding property or
extra expenses to restore operations. Equipment breakdown insurance
can cover all these risks.
You don't have to own a building to face an equipment
breakdown risk. If you are a tenant you still have equipment such
as phone systems, fax machines, computers, air conditioners and
an electrical system. Your lease may also make you responsible for
other equipment that services your premises. Lastly, your operations
and income are dependent upon equipment of others. If the electrical,
heating or cooling system of your landlord broke down, the interruption
of those services could impact you. The right equipment breakdown
coverage can protect you in this time of need.
Please Contact Tom Kallman, President
TMK Risk Management Inc
DBA Kallman Insurance Agency 954-389-5897
www.tmkrisk.com
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