Buy Equipment Breakdown Protection Insurance

Equipment Breakdown Protection Insurance is a type of insurance coverage that specifically addresses the financial risks associated with the breakdown or malfunction of equipment.

This type of insurance can help cover the costs of repairs or replacement of equipment, as well as any resulting loss of income from the equipment being out of service.

It typically covers damage from mechanical or electrical breakdowns, as well as damage from power surges, and can be purchased as an add-on to a commercial property insurance policy.

The average price of a standard Equipment Breakdown Protection Insurance policy for small businesses ranges from $37 to $59 per month based on location, revenues, types of equipment covered and more.

Equipment breakdown protection insurance covers you in the event of an equipment breakdown that renders the equipment unusable for business. First, the equipment will have to be assessed by the insurer and the event will have to be considered a breakdown according to the terms that have been set by the insurance company.

Sometimes there are exclusions, and not everything that goes wrong with equipment will be considered to be a breakdown - for individual terms, ask your insurance company to clarify the terms.

So what does equipment breakdown protection insurance cover? Equipment breakdown protection insurance covers Direct Loss to Property. The policy covers direct loss to all property at the premises described on the declarations that is owned by the named insured or is in the named insured's care, custody or control and for which he or she is legally liable.

This is not limited to the equipment that breaks down. It includes the building, business personal property and other equipment that the equipment may damage as it breaks down or flies apart.

• Electrical Failure: Certain types of electrical failure will not be covered by your EB insurance, though any electrical or electromagnetic energy that damages your equipment will be covered by EB Insurance.
• Mechanical Breakdown: Mechanical breakdown of equipment are covered by EB Insurance, including any losses that have occurred due to mechanical failure.
• Boiler Explosions: Boiler accidents and explosions are classed separately from simple mechanical failure, and there are still many factors at play: But generally, this should be covered under the terms of your EB Insurance.

The Insurance Services Office (ISO) Equipment Breakdown Protection Coverage Form completes the property coverage that you need. Commercial property coverage forms specifically exclude most types of equipment breakdowns while the Equipment Breakdown Protection Coverage Form Insures ONLY equipment breakdown.

Eligible property includes all property the named insured owns. It also includes property that the named insured does not own but that is in its care, custody, or control and for which it is legally liable.

This coverage includes inspection service as a part of the basic coverage because you can eliminate most equipment breakdowns with proper maintenance. These inspections also satisfy any obligation you have to conduct required governmental or statutory inspections.

Consult the policy for definitions and limitations. The terms of this brochure do not represent contract terms. The policy is subject to company underwriting practices.

Covered Cause Of Loss

The Equipment Breakdown Protection Coverage Form covers loss or damage to your covered property that results when covered equipment breaks down.

Covered Equipment

Four types of equipment you may own or operate can be covered:

• Diagnostic Equipment
• Mechanical and Electrical Equipment
• Pressure or Vacuum Equipment
• Production Machinery

This coverage also applies to your computer equipment, communications equipment, and equipment that generates, transmits, or uses energy.

Covered Property

All property you own is covered for damage caused by covered equipment breaking down. Property you do not own but that is in your care, custody, or control and for which you are legally liable is also covered.

Breakdown

Breakdown is direct physical loss or damage to your covered equipment caused by the following:

• Failure of pressure or vacuum equipment
• Mechanical failure, including rupture or bursting caused by centrifugal force
• Electrical failure and electrical arcing

Inspection Service

One of the most valuable features of this form is the inspection service provided by the insurance company. Through these periodic inspections, dangerous conditions in the equipment can be detected before they cause an accident.

This service is included in the premium charged for the policy. In most territories, a governmental body mandates periodic inspections of boilers and other equipment covered under the policy. Most authorities accept the inspections made by the insurance carrier as complying with their laws governing inspections.

The company's inspection is not a warranty of the safety of the equipment and does not relieve the insured of his or her obligations under the federal Occupational Safety and Health Act, nor of any responsibility for the proper use of the equipment.

The company is permitted to inspect any insured equipment and the premises at any time as long as the request to inspect is considered reasonable.

Specific equipment can be suspended from coverage immediately if it is found to be in a dangerous condition. A notification must be mailed or delivered to the named insured but the suspension of coverage is immediate. Reinstatement of the covered equipment cannot be done verbally. The company must issue a written endorsement stating that the equipment is reinstated.

Important Condition - Suspension

Coverage can be suspended immediately if an insurance company representative notices a dangerous condition and notifies you of the suspension. If you continue to operate a suspended piece of equipment, coverage for any damage caused by that equipment breaking down is excluded.

Equipment breakdown protection insurance provides you very broad coverage. A limited number of endorsements are available for use with it that broaden, limit, or exclude coverage:

The following listing identifies endorsements available to modify the Insurance Services Office (ISO) Equipment Breakdown Protection Coverage Form. It is arranged by form number and title, and it includes a brief explanation of the use of each form. This section does not include any state-specific endorsements, changes, or amendments.

FORM NUMBERING

The ten-digit numbering sequence of ISO forms and endorsements has a very specific meaning:

• The first two entries are alphabetical characters that indicate the line of insurance involved. For example, EB denotes Equipment Breakdown.
• The next two digits designate the specific insurance category. The numerals "15" apply to Equipment Breakdown Protection Coverage forms and endorsements.
• The next two digits are the form or endorsement number within the insurance category.
• The last four digits are the edition date of the form or endorsement expressed in month and year format. These digits are not used in this analysis.

Note: Endorsements previously identified as "BM" are now identified as "EB." The Equipment Breakdown Protection Coverage Form Archive lists and describes endorsements used with previous editions of this coverage form.

EB 15 39-Refrigeration Interruption Coverage

This endorsement covers the named insured's refrigerated property that spoils because lack of or excess refrigeration due to a breakdown of covered equipment that occurs at either owned or non-owned locations. It covers the expenses incurred that reduce the loss. It is subject to the insurance company receiving an annual report of values and includes a coinsurance condition that is triggered if the annual report of values is late or is not submitted at all. The coverage contains its own limit and deductible.

EB 99 51-Amendment of Declarations

This endorsement is used to change the original entries on the declarations to reflect changes in limits, coverages, deductibles, and conditions.

EB 99 52-Turbine Units Explosion Coverage

Turbine units only receive the restricted coverage described in this endorsement. The premises where located and the specific unit must be scheduled. The coverage is different, but if accepted, the premium savings is substantial.

EB 99 55-Pressure or Vacuum Equipment

This endorsement restricts coverage. It replaces the definition of covered equipment to include only equipment intended to operate under internal pressure or vacuum. This equipment must be subject to mandatory inspection by state or municipal entities that authorized insurance company inspection personnel can do.

Using this endorsement results in a lower premium because the breakdown coverage provided is so limited.

EB 99 56-Limited Coverage for Specified Equipment

This restrictive endorsement limits coverage for the scheduled described covered equipment while maintaining the broader coverage for other equipment and premises. A limit of loss, a complete description of the equipment and premises, and the number of days for business income coverage must be entered on the endorsement schedule.

This endorsement changes coverage from a blanket to a scheduled basis for the premises listed.

EB 99 57-Production Machinery Exclusion

This endorsement restricts coverage. It amends the definition of covered equipment to exclude production or process machinery and related equipment.

EB 99 58-Spare Equipment and Parts

This endorsement allows the named insured to separately cover spare parts and equipment that are not functioning or that are not available for use. Such property is subject to the details entered on the endorsement schedule. This lets the named insured fully cover equipment and parts that are important to its operation while still providing some limited coverage for spare equipment and parts.

The endorsement must be read carefully to be certain that all scheduling matches the endorsement's wording.

EB 99 59-Actual Cash Value

This endorsement changes the Property Damage Valuation from replacement cost to actual cash value. It may be limited to only damage at scheduled premises and/or caused by scheduled equipment.

Because this is a restricting endorsement, any scheduling must be very specific in order to eliminate confusion.

EB 99 60-Suspension/Reinstatement of Coverage

This endorsement immediately suspends coverage on any equipment the insurance company considers unsafe. The suspended equipment is identified and the date on which the suspension began. The suspension can only be lifted by the attachment of this endorsement to the policy. The suspension is immediate, but equipment is not reinstated until the endorsement that reinstates coverage is issued.

EB 99 61-Valuation of Specified Property

This endorsement is used to change the valuation for the covered property listed on the endorsement schedule. The new valuation is its fair market value, reduced by any salvage obtained and labor, materials, or expenses that are not incurred in its sale.

EB 99 62-Covered Equipment Deductible Waiver

f covered equipment sustains a second loss within two years of the first loss, the deductible for the second loss is waived. The waiver is for the equipment only. The waiver does not apply to any related property damage. In addition, if the deductible for the first loss is less than the deductible for the second loss, only the amount of the first deductible is waived.

EB 99 63-Off-Premises Equipment Coverage

This endorsement extends coverage to apply to damage to covered property caused by equipment that is taken off premises. As a condition of coverage, the equipment must be at a fixed location, be ready for use, and under the named insured's control.

EB 99 64-Optional Valuation Coverage

This endorsement replaces paragraph (1) of the Valuation condition but only for equipment that is less than five years old. It allows the named insured to replace equipment that is considered a total loss with equipment that is equivalent in purpose instead of the same kind of equipment. The insurance company pays only actual cash value if the equipment is not replaced. This allows the named insured to carry a lower amount of coverage on equipment that it will not replace with identical equipment. This might be particularly useful with rapidly-changing-technology-type-equipment such as computers and communication equipment.

EB 99 65-Product Withdrawal Coverage

This endorsement covers expenses related to the withdrawal of defective products.

EB 99 66-Solidification Coverage

This endorsement covers the damage that occurs because items solidify following a covered breakdown. It does not cover the loss of value to the solid item, just the damage caused when it occurs.

Examples are molten metal that cools and adheres to processing equipment or concrete that hardens and adheres to a mixer when agitation stops.

EB 99 67-System Installation Coverage

Installing some equipment can take many months. This endorsement covers damage to equipment while it is being installed and during testing. It also covers loss of income because of such damage. Optional coverages are available, based on entries on the endorsement schedule. Once the installation is complete, this equipment's value should be added to the policy's per breakdown coverage.

Equipment Breakdown Insurance provides coverage for losses caused by the sudden and accidental breakdown of equipment. Here are some examples of claims that can be covered by Equipment Breakdown Insurance:

• Electrical system failure: If there is a power surge or an electrical short circuit, it can cause damage to electrical equipment such as computers, servers, or manufacturing machinery. Equipment Breakdown Insurance can help pay for the cost of repairing or replacing the damaged equipment.
• Boiler explosion: If a boiler malfunctions and explodes, it can cause significant damage to the surrounding property and can even injure employees or customers. Equipment Breakdown Insurance can help pay for the cost of repairing or replacing the damaged equipment and property, as well as any liability claims that arise from the incident.
• HVAC system failure: If the heating, ventilation, and air conditioning (HVAC) system fails, it can cause discomfort for employees and customers and can even damage inventory or equipment. Equipment Breakdown Insurance can help pay for the cost of repairing or replacing the HVAC system, as well as any property damage or loss of income caused by the failure.
• Medical equipment failure: If medical equipment such as an MRI machine or X-ray machine malfunctions, it can cause delays in patient care and can even pose a risk to patient safety. Equipment Breakdown Insurance can help pay for the cost of repairing or replacing the equipment, as well as any liability claims that arise from the incident.
• Elevator or escalator breakdown: If an elevator or escalator malfunctions, it can cause inconvenience for employees or customers and can even cause injury. Equipment Breakdown Insurance can help pay for the cost of repairing or replacing the equipment, as well as any liability claims that arise from the incident.

Overall, Equipment Breakdown Insurance can help businesses manage the financial impact of sudden and accidental equipment failures, including the cost of repairs or replacement, lost income, and liability claims.