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Michigan Business Insurance: Protection against Equipment Breakdown

Posted on: Thursday, October 15th, 2015

All Michigan businesses experience equipment failure at some point. Even if you have your own team of troubleshooters, major breakdowns can still seriously hamper your operations. Without the right business insurance coverage, you’d have to deal with costly repairs and replacements, all the while incurring revenue loss. This is the very reason why you should consider getting equipment breakdown insurance.

Filling the Gap in Property Packages

img-1Equipment breakdowns require a specialized form of coverage. Standard commercial property packages do not usually cover business interruption losses and extra expenses due to mechanical mishaps. When damage to another property ensues, when your business has to close for an extended time, or when special parts are not readily available to repair your damaged equipment, losses can easily add up and balloon. Equipment breakdown insurance is intended to fill these exclusions.

What Equipment Breakdown Covers

Equipment breakdown provides protection against unforeseen or “accidental” breakdowns of a broad range of mechanical, pressure and electrical equipment, although many risk management professionals use the archaic term “boiler and machinery”. Its relevance stems from the fact that you can’t rely on service contracts and warranties since these are often too restrictive. They cover a piece equipment only for a specific duration and for certain types of failures.

Equipment breakdown coverage provides benefits beyond these limits; it covers material and labor expenses associated with the replacement or repair of the damaged equipment, income losses due to business interruption, replacement of spoiled stock, and other expenses incurred in the attempt to minimize loss or expedite restoration.

“Accidents” Defined

Most property policies, whether insuring loss on named perils or on all perils, typically take effect when loss is caused by the external event like windstorm, vandalism, or fire, as stated in the contract. Equipment breakdown insurance, however, is distinct in the sense that “accidents” refers to the issues that originate within the equipment and not due to external factors.

Finding the Best Type of Policy

Equipment breakdown can be offered either as standalone coverage or as an add-on to your existing casualty and property policy. To determine the minimum degree of protection your company needs, consult with business insurance professionals from reputable firms in Michigan, such as Allied Insurance Managers, Inc.

Sources:

About Equipment Breakdown Insurance, Nationwide.com

Equipment Breakdown—More Than Just Boiler and Machinery, IRMI.com

Paul W. Kosmal

Senior Account Executive at Allied Insurance Managers, Inc.
Paul received a BBA from Western Michigan University, majoring in their renowned Sales and Business Marketing Program. Paul has also attained three prestigious Insurance Designations, Certified Insurance Counselor (CIC), Licensed Insurance Counselor (LIC) and Certified Professional Insurance Agent (CPIA)
Allied Insurance Managers, INC.