Boiler and Machinery Insurance

Boiler & Machinery Insurance - Protect Your Equipment and Business

When equipment that’s essential to your business stops working, production can be reduced significantly or even grind to a halt. Either way, equipment breakdown can affect your company’s bottom line — an outcome that no one, except perhaps your competition, wants to see. That’s why a strategic investment in boiler and machinery insurance makes sense , especially when considering risks like electrical failure. We’ll work with you to assess your risks and design and negotiate a competitive, tailored insurance program that will protect your company from equipment breakdown, property damage and business interruptions.

What is Boiler and Machinery Insurance?

Boiler and machinery insurance, also called equipment breakdown insurance, provides coverage for physical damage and financial loss that can result from an equipment breakdown. This type of insurance can be available on a monoline policy basis or embedded within a property insurance policy

What does Boiler and Machinery Insurance cover?

Boiler and machinery insurance covers the costs required to repair or replace damaged equipment, as well as losses incurred because of the time it took to repair the equipment and restore business operations. It covers not only the damage to the machine, but also other property damages caused by the malfunctioning machine.

Why does my organization need Boiler and Machinery Insurance?

The cost of equipment breakdown can be significant, and breakdowns can occur often enough for there to be a high risk to your organization’s financial health due to the high restoration cost. Business property insurance typically does not pay for equipment accidents, especially given the unique causes of equipment failures, which is why boiler and machinery insurance is needed for these more uncommon risks. This type of insurance is becoming increasingly important due to the rise of equipment using electronic components. However, common exclusions in equipment breakdown insurance could include losses caused by fire, explosion, or water damage, which are typically covered under other types of insurance.

Which industries typically need Boiler and Machinery Insurance?

Boiler and machinery insurance coverage is often purchased by manufacturing companies since they use various types of equipment that need to run constantly. Businesses that process goods using electrical, mechanical, heating, or refrigeration devices on a large scale also commonly need boiler and machinery insurance. Additionally, small businesses can also utilize boiler and machinery insurance to protect common items such as air conditioners, computers, refrigerators, and ovens. Broad coverage is often referred to as the comprehensive form for small business, offering a wide range of protection tailored to their specific needs.

Common Inclusions

Boiler and machinery insurance can cover a wide range of equipment based on your business’s needs. The most common coverage includes manufacturing equipment such as boiler machines, generators, engines, cables, HVAC systems, and transformers. It can also cover office equipment such as elevators, computers, copiers, telephones, and even security systems. Coverage is based on the concept of an ‘accident’ that damages covered equipment, ensuring that only unforeseen and sudden events are included under the policy.

Coverage Options

Boiler and machinery insurance coverage can be tailored to meet the specific needs of a business. The standard policy form provides comprehensive coverage for all insurable boiler and machinery equipment. However, businesses can customize their coverage to focus on certain types of machinery equipment that are critical to their operations. Coverage options include basic coverage, which offers essential protection, broad coverage for more extensive protection, and consequential damage coverage, which addresses losses resulting from equipment failure. This flexibility ensures that businesses can choose the insurance coverage that best fits their unique requirements.

Benefits of Boiler and Machinery Insurance

Boiler and machinery insurance offers several key benefits to businesses:

• Provides financial relief for repairing or replacing damaged equipment, which can be a significant expense.

• Covers business losses incurred from equipment not functioning, helping to mitigate the impact on business operations.

• Includes coverage for consequential damage, such as loss due to spoilage of specified property from lack of power, light, heat, steam, or refrigeration.

• Can be customized to fit the specific needs of a business, making it a valuable tool for risk management and ensuring continuity in the face of unexpected equipment failures.

Extra Expense Coverage

Extra expense coverage is a crucial component of boiler and machinery insurance, designed to help businesses recover from equipment failures by covering the extra costs of maintaining operations. While it excludes coverage for loss of income, it can be combined with business income coverage to provide comprehensive protection. This coverage can be customized to fit the specific needs of a business, ensuring that all potential extra expenses are accounted for. By including extra expense coverage in their insurance policy, businesses can better manage the financial impact of equipment breakdowns and continue their operations with minimal disruption.

Contact a HUB broker to get started.