When equipment is working as it should, we take it for granted. But when something breaks down, operations can quickly grind to a halt. That’s why equipment breakdown insurance is so important. Break downs can happen in any type of business setting:
- A power surge damages your computer network
- Your electrical system short circuits, causing your business to shut down temporarily
- An employee error damages your only production machine
These situations are more than just inconvenient. They could cost a lot of money – lost productivity means lost revenue. That’s why Nationwide offers broad equipment insurance for breakdowns to keep your business running smoothly in case of a problem.
What does equipment breakdown insurance cover?
Also known as "boiler and machinery" insurance, equipment breakdown coverage protects against breakdowns caused by power surges, motor burnout, boiler malfunction and operator error. Equipment breakdown insurance covers all sorts of equipment – mechanical and electrical equipment, computers and communication equipment, air conditioning and refrigeration systems, boilers and pressure equipment. It also includes coverage for new technology.
Equipment breakdown coverage can pay for:
- The cost to repair or replace the damaged equipment
- Costs for 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. Say for example, you run a restaurant in a leased space. 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 you pay for that lost business income.
What if an equipment problem off site impacts your business?
Sometimes, equipment breakdowns at other locations can cause a loss to your business.
For example, if you run a small business and depend on your website for orders, you probably have an independent Internet service provider hosting 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.
Do property insurance or warranties cover damage to equipment?
Most standard property insurance policies don’t cover equipment breakdown, and warranties are restrictive – typically covering only 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, which is the cause of many equipment breakdowns.
How much equipment insurance should you buy?
To determining the amounts and limits of coverage, it’s important to look beyond the face value of the equipment itself and consider all the situations that could occur. What if damage occurs to other property as a result of your equipment breakdown? What if parts for the damaged equipment are not readily available? Or if you are closed for an extended period of time? Seeing how equipment breakdown losses could add up can give you a better idea how much to insure for. So if you own a business or commercial property, why not find an agent and get started today?