As businesses continue to depend on electrical power and technology more each day, the costs of failure can be immense. It has the potential to extend beyond momentary inconveniences and repair costs and lead to significant economic losses. Having comprehensive equipment breakdown coverage can help you manage the risks. Learn more about equipment breakdown insurance so you can make an informed decision when looking at business insurance quotes.
Insuring Machinery in Case of a Breakdown
Equipment breakdown insurance can be useful when you have an unexpected machine failure. The best business insurance policies address both the inside and outside threats to your machinery to ensure you are protected. Most policies typically include the following:
- Connections or wires and cables coming loose
- Electrical shorts
- Power surges, including high voltage into the electrical system
- Loss of pressure or vacuum
- Condensation or moisture that damages wires, circuits, or other components
- Motor failure
- Operator error
- Explosions of steam boilers, steam pipes, steam turbines, or steam engines
Different Equipment or Machines in Businesses
Here are a few examples of equipment malfunction in different sectors:
Automotive Repair – Hydraulic lifts or jacks, air compressors, diagnostic machines, battery chargers, lug nut removers
Farms and Agricultural Facilities – Irrigation systems, solar or wind electric generators and turbines, oxygen and carbon dioxide monitors
Restaurants – Freezers, refrigerators, coolers, stoves, ovens, beverage machines, dishwashers, and cash registers
Medical Practices – Imaging equipment such as sonogram or x-ray machines, vital sign monitors, and systems used for storing billing details and medical records
Factors to Consider for Equipment Breakdown Business Insurance
Machinery Breakdown Does Not Include Wear and Tear
Machines such as computers and motors may not always work smoothly. They will often start to lose effectiveness and speed overtime because of prolonged use. If the equipment still functions, these conditions will not qualify for breakdown insurance coverage.
Equipment Breakdown Includes Repair or Replacement
Having a business insurance policy with coverage for machinery breakdown helps cover the cost of repairs or replacing damaged machines.
Damage to Other Property
With equipment breakdown coverage, you can get reimbursed for the costs associated with replacement in an unfortunate event such as rupturing steam pipes and engines. You will also have insurance against damages to other property by opting for this coverage.
Equipment Maintenance is Crucial
Business insurance brokers place the utmost importance on timely inspections and a regular maintenance routine for machines to qualify for equipment breakdown claims.
Why Property Insurance is Not Enough
Most business owners believe that standard property insurance policies cover loss or damage to the contents. However, it may not cover all the ways that equipment or other property may be damaged. Business property coverage includes different risks than equipment breakdown coverage. Casualty and property insurance policies cover losses due to external factors, which include the following incidents:
- Accidental discharges of water
- Damage from vehicles, falling objects and aircraft
The basic business policies don’t cover damage to or loss of belongings because of burst pipes, power surges, electric arcs, or other mechanical breakdowns of machines and systems.
Consequences of Equipment Breakdown
Mechanical and electrical breakdowns can be catastrophic and cause significant financial and other losses, including the following:
Loss of Production
Damaged machines cannot generate or manage orders, produce goods, or perform their functions, leading to unnecessary downtime. Although you won’t be generating revenue, you will be responsible for paying workers.
Loss of Customers
Power failures tend to affect many businesses and establishments that involve paying occupants. They have strict rules and regulations to ensure safe conditions, and the loss of power may disrupt the services. This may cause you to lose customers because you can’t respond to their requests and concerns or receive and process orders on time.
Opting for business insurance, including safeguarding your machines against breakdowns, is a wise decision for your business.
We Can Help You Find the Ideal Business Insurance
To find the best business insurance, you need to consider the potential inconvenience and harm that equipment breakdown can inflict. Relying only on the standard insurance policy can cost you more because of replacement costs, uncovered repair bills, and other losses.
If you are looking for reliable business insurance quotes, Orr & Associates can help. We are a division of Western Financial Group and have expert business insurance brokers who can work with you to find a suitable policy that meets your needs. Whether you are looking for small business insurance or any other coverage, our specialists can guide you.