Damages caused by the following are examples of losses that can be covered by Equipment Breakdown insurance:
- Power surges
- Electrical short circuits
- Electric arcing
- Loss of lubrication
- Mechanical stress
- Metal fatigue
Equipment Breakdown Insurance does not cover: deterioration; corrosion or erosion; wear & tear; leakage of valves; shaft seals, joints or connections; vibration or misalignment. However, breakdown resulting from these items can be covered.
What Equipment Does Equipment Breakdown Insurance Cover?
Equipment breakdown coverage will cover a wide variety of equipment:
- Computers & phone systems
- Printers, scanners & photocopiers
- Laser/IPL, electrolysis, microdermabrasion equipment
- Spa pedicure chairs
- Air conditioning & ventilation systems
- Electrical systems (transformers, electrical panels, wiring)
- Cash registers & inventory control systems
- Fans, motors and pumps
Not only does it cover the equipment, but it can also cover indirect damage that can have a financial impact on your business such as:
- Business interruption (reducing or eliminating your company’s cash flow)
- Extra expenses (expenses you incur to continue to operate)
- Lost rental value (lost rent if sub-letters don’t pay rent due to the breakdown)
What If My Equipment Is New or Covered Under A Warranty or Full Service Contract?
- Will the warranty or service contract pay for business interruption, resulting damage, or operator error?
- 35% of all equipment breakdown accidents result from operator error…do not be dissuaded by the fact that the equipment may be new and unlikely to fail.
Tenants Do Need Equipment Breakdown Insurance to Cover:
- Direct damage to your own computers, phone equipment, printers, point of sale system, etc…
- Service interruption for accidents to public utilities or landlord’s equipment servicing the location. Failure of this equipment creates a business interruption.
- Most commercial leases now insist on equipment breakdown insurance to cover your responsibility for the air conditioning, ventilation and electrical systems.
This highlights some of the coverages available with Equipment Breakdown Insurance – actual coverage depends on the type of policy purchased. Refer to policy wordings for complete information on coverages, limitations and exclusions.