Are you aware that most standard business insurance policies do not provide comprehensive coverage for your equipment and machinery?
Today we are going to discuss the difference between equipment insurance and equipment breakdown insurance, also known as boilers and machinery insurance.
Commercial Property and Equipment Insurance
The following are typically covered by your business’s commercial property policy:
- Tools and equipment used off-site for business purposes
- Fencing and landscaping
- Lighting systems
- Furniture and fixtures
- Personal and customer property at your business site
- Windows and outdoor signs
While there is some coverage for equipment under commercial property insurance, there are gaps in this policy for industries where equipment is a key part of your business.
Let us explain – commercial property insurance provides coverage for physical loss or damage to your equipment caused by external factors, including fire, windstorm, hail, theft, vandalism and other perils.
Read more: Commercial Property Insurance Explained
What happens to my equipment if the damage is caused by power surges, electrical shorts or mechanical malfunction?
The typical equipment coverage under your commercial property policy does not include the coverage resulting from internal damages to your equipment.
Your business insurance covers a range of risks associated with your business. However, depending on your business, you may need additional coverage. There are a number of factors to consider if you need more coverage than what a typical business insurance policy provides. The following criteria can include the type of equipment you use and the value of the product or service you are offering, where your equipment is being used and how often you or your employees are using the equipment.
But let’s be honest here, unforeseen circumstances can happen at any time. We advise businesses to include equipment breakdown in their insurance policy because it can prevent a lot of headaches.
Equipment Breakdown Insurance
Let’s say you work in the construction industry. A sudden and accidental breakdown of the whole cabin arrangement of your excavator is being constricted from its rotating capabilities.
Insurance coverage for equipment breakdowns may cover inspection and diagnosis fees, as well as labour and materials for repairing the cabin arrangement.
The term equipment breakdown was given to cover the exclusions in the standard commercial property policy. You can use this insurance to protect your equipment from internal damage, including electrical and mechanical failures.
Equipment breakdown insurance is for the following business lines:
- Construction companies
- Property owners
- Auto shops
Many of the exclusions for equipment that are found in traditional commercial property insurance are covered under an equipment breakdown policy. If your business relies heavily on equipment or electronics, you’re more likely to experience repairs and accidental breakdowns than a business owner who uses equipment or electronics to complement their products.
Depending on the risk associated with your business, taking extra precautions and going the extra mile is highly recommended if your tools and equipment are important to your business.
When you own or operate a business in an area susceptible to explosions and nuclear hazards, this policy may not be able to cover the full extent of your needs. Equipment breakdown additionally excludes any damage caused by rust, mold, pest damage and pollution to your equipment.
Additional Coverage for Tools, Machinery & Equipment
An Equipment Floater provides coverage for equipment that can be transported between job sites and that is normally excluded from your standard business insurance policies. This insurance floater will cover the direct physical damage and loss to your portable equipment and mobile machinery. The types of equipment insured include forklifts, bulldozers, road graders, derricks, concrete mixers and more. Equipment floaters usually give you two coverage options to choose from or to combine: “scheduled coverage” and “blanket coverage”.
- In scheduled coverage, you will work with your broker to create a detailed schedule of all the equipment you would like coverage for.
- In blanket coverage, you will work with your broker to come up with a definition for “covered property” and anything that falls within this will be covered, regardless if it appears on your equipment schedule or not.
You need Pollution Liability Insurance if you work in an industry that exposes you and neighbouring businesses to specific environmental risks and liabilities corresponding with pollution. This policy is designed to protect businesses from third-party bodily injury, environmental and property damage in the event of pollution on a covered job site.
Installation Floater covers moveable and personal property installed or changed by a contractor. This policy covers property in the course of being installed, including labour, so you’re protected if there is a loss part-way through the job. As a business owner, you can obtain a blanket policy for all work performed with limits set on average and/or maximum installation exposures.
Cyber Security Insurance is often overlooked but it is important to understand the risks of cyber attacks and threats, which are on the rise for small and medium-sized enterprises. Cyber security insurance will provide coverage for businesses that rely on technology to minimize the downtime associated with cyber-attacks.
The brokers at Fuse Insurance will help determine what coverages are right for your business and come up with a comprehensive insurance plan that meets the unique needs of your company. Our online quote application is quick and easy and provides the information we need to get your insurance policy in your hands as soon as possible. To start your quote now, fill out our form online or call 1-866-387-FUSE (3873).