If your business creates physical products for other businesses or consumers, odds are that your company depends on different types of machines and equipment to produce the goods that you sell to others. Production machinery is essential for the business to run smoothly and plays an important role in meeting deadlines, preserving quality standards, and ensuring financial success. When mechanical equipment fails, however, it can cause major disruptions to business, including costly downtime, lost production, and even the destruction of the machine.
What is Equipment Breakdown Coverage?
Equipment breakdown insurance coverage which is commonly referred to as boiler and machinery insurance or mechanical breakdown insurance, provides businesses with financial assistance and protection in the event of sudden and unexpected equipment failures. Businesses that utilize machines like computers, manufacturing equipment, or refrigerators to make money can be protected from severe economic setbacks with this insurance policy. Equipment breakdown insurance protects manufacturers from the financial burden caused by repairs or replacements of malfunctioning machinery and equipment due to mechanical issues.
Manufacturers Need Equipment Breakdown Insurance! Here's Why!
Protects Against Unexpected Breakdowns
By purchasing a mechanical breakdown insurance policy, you can safeguard against potential unanticipated failures of manufacturing machinery whether they be from power surges or operator error. Regardless of how carefully a machine is maintained, its performance may still be affected by issues like electrical faults, power outages, or mechanical breakdowns. In the event of a breakdown, repairing or replacing the damaged machinery can be an incredible additional cost for a business. A Standalone Policy like equipment breakdown insurance will likely save you money in the long run as it's a matter of when and not if your business property will fail.
Minimizes Downtime
Manufacturing businesses can be greatly impacted by downtime, as it can cause delays in meeting customer demands, disrupt production schedules, and ultimately lead to loss of revenue. Business equipment insurance can help minimize downtime by covering the costs of repairing or replacing damaged machinery, allowing the business to get back up and running as quickly as possible while minimizing out-of-pocket costs.
Covers a Wide Range of Equipment
Commercial equipment breakdown coverage is not limited to just one type of machinery or equipment. It can provide protection for a variety of equipment, including boilers, compressors, motors, refrigeration systems, electrical systems, security systems, air conditioning units and much more. This comprehensive coverage ensures that businesses are protected against breakdowns of any critical machinery or equipment they use in their operations.
Protects Against Business Interruptions
In addition to covering the costs of repairing or replacing damaged machinery, equipment breakdown insurance can also provide protection against business interruptions resulting in the loss of business income. This business interruption insurance includes the costs associated with lost revenue, increased operating expenses, and extra expenses incurred due to the mechanical equipment breakdown, such as the cost of hiring temporary workers or rental equipment.
Covers Electronic Equipment
With the increasing reliance on technology in manufacturing operations, it is essential to have key equipment coverage for electronic equipment, such as computers, control systems, and other technology-based equipment. Commercial equipment breakdown coverage can provide protection for these types of equipment, ensuring that businesses are not left with unexpected repair or replacement costs.
Provides Peace of Mind
Finally, commercial equipment breakdown coverage provides peace of mind for manufacturing business owners. Knowing that their critical machinery and insured equipment are protected against unexpected breakdowns can allow them to focus on running their business without worrying about the potential financial impact of a breakdown that leads to a loss of income.
Top Equipment Breakdown Claims In Manufacturing
- Electrical failure, electrical surges, electrical shorts, or malfunction
- Mechanical failure or normal wear and tear
- Boiler or pressure vessel failure
- Loss or damage to production machinery
- Loss or damage to computers and other electronic equipment
- Loss or damage to power-generating equipment
- Loss or damage to HVAC systems
- Loss or damage to refrigeration systems
- Loss or damage to conveyor systems
- Loss or damage to communication equipment.
These are just several examples of claims that can potentially be covered by an equipment breakdown policy. Not all insurance policies may provide the same level of coverage so it is vital that you discuss with your independent insurance agent to make sure the appropriate insured equipment is included in your coverage and that the true cost of equipment breakdown is in fact covered.. Coverage options may vary by provider so discussing your individual needs is an important step in reviewing what insurance company is right for your business.
How To Purchase Equipment Breakdown Insurance
There are several options for obtaining commercial equipment breakdown coverage. The first option is to include coverage as a part of a property policy. Coverage on standard commercial property insurance policies is often more limited in scope that a stand alone breakdown insurance policy.
The best option for any manufacturing business is to buy a stand alone equipment breakdown policy through one of several top insurance carriers that provide specialty-designed commercial equipment breakdown policies. These carriers are well-versed in the claims that are common to equipment breakdowns and can provide an immediate response to covered events to limit your downtime.
At Insurance For Texans, we represent most of the top commercial Texas insurance carriers for equipment breakdown policies including Travelers, Chubb, and more. Contact our office today to schedule a meeting to discuss your equipment risks today so that we may determine the right coverage limits for your needs.