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What Does Equipment Breakdown Cover?

What Does Equipment Breakdown Cover?

As a business owner, you may have been presented a quote by your broker for Equipment Breakdown (aka Boiler & Machinery) coverage. You may have even seen this coverage as a line item on a property, package or business owner’s package (BOP) quote. In many parts of the country, boilers are no longer used, but this coverage is still valuable for many reasons. What Is Equipment Breakdown? Decades ago, this coverage was called Boiler & Machinery and was designed to cover boilers and production machinery used by factories and other businesses. Over time this coverage was expanded to cover such things as air conditioning units and elevators, so the coverage was renamed to Equipment Breakdown insurance. Equipment Breakdown insurance is property coverage. Heating and air conditioning equipment, as well as other machinery components now rely heavily on electricity. Electrical arcing, which is excluded by the property coverage form, is a major reason for equipment breakdown and would be covered under equipment breakdown insurance. What Does Equipment Breakdown Cover? This coverage is designed to cover a significant gap in the Building & Business Personal Property coverage form that specifically excludes: Mechanical breakdown The explosion of boilers and pressure vessels and Electrical arcing The systems that are usually affected by these claims include: Electrical systems Heating, air conditioning, and refrigeration Boiler & other pressure vessels Computers and communications equipment Mechanical Production systems Alternative energy systems Some claim examples: An air conditioning motor burned out in a high rise senior citizens apartment complex at the height of summer. “Spot coolers” were rented to keep the place cool while employees worked overtime to...