Equipment Breakdown Coverage
Un-Happy New Years’ Eve
A large medical supply distribution company located in Oak Brook, Illinois had a very un-happy New Years’. On December 30, 2008, their computer facility housing 4,000 square feet of data processing equipment and all of the call center equipment for 240 employees was damaged due to water. The water came from the sprinkler system that kicked in when the heating alarm in the processing room overheated. The backup temperature alarm control malfunctioned. The secondary temperature alarm also malfunctioned. A processing room full of essential operating equipment began overheating – with no alarm in site, and no one at the office to notice. It got too hot, the sprinkler system went off and everything was down hill from there.
Resolution
This happened on Dec 30, 2008. The company was able to set up operating functionality off site within 48 hours. The damages are undetermined as of 1/8/09.
They are self-insured. They were most likely also self insured for the business interruption that they suffered as a result of the damage.
Typically property insurance covers equipment forstandard perils, such as fire, but excluded losses due to:
- Mechanical breakdown
- Electrical arcing
- Damage to Steam Boilers and Hot Water Heaters
Your business may depend on many types of equipment such as:
- Electrical Equipment
- Mechanical Equipment
- Business Equipment
- Refrigeration Equipment
- Heating and Cooling Systems
This equipment is subject to sudden and accidental breakdown. Computers or EDP equipment are not covered by this insurance. Equipment Breakdown insurance helps protect you from the costs associated with the losses to your building’s equipment.
It pays for:
- Cost to repair or replace equipment damaged by a breakdown
- Other costs or expenses to limit the loss or speed business restoration
- Loss of business income due to an “accident”
Ask yourself: What’s more likely? A power surge that damages electrical distribution equipment or a major fire? You’re probably adequately insured for fire. Shouldn’t you insure for what’s more likely to occur?
Please contact us to discuss this coverage further and see just how affordable this coverage can be.
