In the heart of Kentucky, we are known for two things: horses that run fast and bourbon that goes down smooth. At the core of every business, whether it’s that golden pour or the Run for the Roses, equipment always keeps the excitement moving. For my client, Vendome Copper & Brass Works Inc., it’s their world-renowned Copper stills keep the mint juleps flowing and for the local restaurants, their commercial grills keep the good times cooking.
Many clients believe that their current insurance package covers electrical failures or mechanical issues. Taking a good hard look with your agent can be the difference between keeping your business running when you most need it or catastrophic interruptions that cost both time and money.
What is Equipment Breakdown Coverage?
-Once known as Boiler & Machinery Insurance- this product is distinctly different from property coverage. It is designed to cover more than just heavy machinery such as pressure vessels and boilers but HVAC units, refrigeration equipment, electrical systems, computers, telephones, and security systems, and others.
-Covers internal failures such as power surges or motor burnout unlike property coverage that is triggered by external perils like fire or theft.
-The term equipment can be a misnomer for smaller businesses. Even standard office buildings may be subject to exposures like elevators, HVAC, boilers and more.
What Does it Cover?
–Replacement or repair of equipment damaged in the course of business due to—power surges, mechanical failures, electrical arcing, and in some cases, operator error.
-For those with refrigerated goods, Spoilage can be covered for perishable goods damaged due to equipment failure.
-Business interruption can cause lost income due to the breakdown. Business Income coverage can be often bundled with the equipment breakdown to pad against this loss.
–Expediting Expenses- Often times when unexpected breakdowns happen, there are costs related to overnighting new inventory or ordering rush repairs.
–Data Restoration: The ways of the metal filing cabinet era are over. Restoring electronic data due to equipment breakdown can be costly and time-consuming. In a world where data lives digitally, data restoration coverage can help.
Why it Matters.
Kentucky may run on bluegrass and bourbon but even the most well-oiled machines breakdown. A clear understanding of your risk exposures is the first step toward effective protection. Knowing that equipment breakdown is a separate coverage from property insurance is a great step toward a resilient risk strategy. Equipment failure isn’t just inconvenient. It’s costly. Here at Hyland, we are educators ready to help clients understand their business and the exposures that come with. We can work with every type of business to make sure every operation is prepared—not surprised.
