When equipment is working, we take it for granted. But when something breaks down, things can quickly grind to a stop.
- A power surge could damage your computer network.
- Your electrical system could short circuit, causing your business to shut down temporarily.
- An employee error might damage your only production machine.
Nationwide understands that damaged equipment can mean lost income. That’s why we offer broad insurance for equipment breakdowns to keep business running smoothly.
What equipment breakdown insurance covers
Also known as "boiler and machinery" insurance, equipment breakdown coverage protects against breakdowns caused by power surges, motor burnout, boiler malfunction and operator error.
Mechanical breakdown coverage covers mechanical and electrical equipment, computers and communication equipment, air conditioning and refrigeration systems, boilers and pressure equipment.
It can pay for:
- The cost to repair or replace the damaged equipment
- Costs associated with the time and labor to repair or replace the equipment
- Business income losses when a covered breakdown causes a partial or total business interruption
- Other expenses incurred to limit loss or speed restoration
- The cost to replace spoiled stock or materials
What if you don’t own your building?
Even if you lease your building or use equipment that belongs to others, you still need equipment breakdown insurance.
Let’s say you run a restaurant in a leased space, and the electrical panel shorts out, killing power to the heat, air conditioning, lights and refrigerators for a couple of days. Although the owner of the building is responsible for making the repairs to the panel, you’ve lost customers and income. Equipment breakdown insurance helps pay for that lost business income.
What if an equipment problem off site impacts your business?
Sometimes, equipment breakdowns at other locations can cause significant losses to your business.
For example, if you run a small business and depend on your website for orders, chances are that an independent Internet service provider hosts your site at another location. What happens if that location loses power or experiences damage to its equipment, causing an interruption of your web presence resulting in a loss of orders? Equipment breakdown coverage helps pay for lost business income when a key supplier’s equipment breaks down.
Will your property insurance or warranties cover damage to equipment?
Most standard property insurance policies do not provide insurance for equipment breakdown, and warranties cover only so much.
Warranties are restrictive, and typically cover new equipment for a determined length of time, and for specific types of product failures. Also, warranties don't pay for lost business income or equipment damage due to operator error, the cause of many equipment breakdowns.
How much should you buy?
When determining the amounts and limits of coverage, it’s important to look beyond the face value of the equipment being insured and consider all the situations that could occur. What if damage occurs to other property as a result of an equipment breakdown? What if parts for the damaged equipment are not readily available? What if you are closed for an extended period of time? You can imagine how equipment breakdown losses could really add up.