Why Would Commercial Property Need Equipment Breakdown Coverage?

Businesses from large manufacturers to small stores, rely on their equipment to maintain their every day operations.  No business can afford losses to their property.  Such losses may arise from mechanical, electrical, or pressure equipment.  This can be damage to items such as telephone systems, electrical systems, computers, copiers, production equipment, boilers, fired vessels, fired water heaters, unfired vessels, refrigeration units, air conditioning systems, compressors, pumps, gears and gear sets, engines, motors, generators, transformers, switch boards, distribution systems, and more.

Equipment Breakdown Coverage provides the following:

1. Property Damage – Covers direct damage to covered property, such as certain types of office machinery and equipment that has to be listed and in the policy.

2. Expediting Expenses – This coverage applies to extra costs insured experiences in order to make temporary repairs and to speed-up the permanent repair or replacement of damaged property.

3. Business Income and Extra Expense – Extra Expense Only – The two may be purchased together or extra expense coverage alone. For example, a covered business loses most of its records due to failure of its main server. Most of the costs to restore the information would be covered under this option.

4. Spoilage Damage – Spoilage damage to raw materials, property in process or finished products is covered when that property is in storage or in the course of being manufactured. Coverage applies to such property that the insured owns or is legally liable under written contract and spoilage is due to a lack of or excess of power, light, heat, steam or refrigeration.

5. Utility Interruption – This coverage is ONLY available when a customer has also purchased coverage for Business Income and Extra Expense – Extra Expense Only OR Spoilage Damage. This covers loss involving equipment breakdown created by loss of utilities (electric, gas, water or communication). The loss or service must last beyond the time-limit that appears on the policy.

6. Newly Acquired Premises – This automatically covers newly acquired premises purchased or leased by the insured and the period of protection depends upon the length of time selected for this coverage (i.e. such as 30 days, 60 days, etc.).

7. Ordinance or Law Coverage – An endorsement that provides coverage after an insured has suffered a physical damage loss such as a fire.  These damages are normally excluded in standard property coverage forms.  The coverages available in this endorsement are cost to demolish the undamaged portion of the building, replace with new construction as required by law, and cost to clear the land of debris after demolition.

8. Errors and Omissions – This coverage protects your company, or you individually, if a client holds the insured responsible for an error in service that you provided, or failed to provide, that did not have results as displayed in your contract.

9. Brands and Labels – Pays for a company’s expense to remove labels from damaged merchandise or to mark the items as “salvage.”

10. Contingent Business Income and Extra Expense – Extra Expense Only Coverage – Protects loss of the “dependent business” from an external business from a breakdown to equipment at premises.

Talk with a certified insurance professional today with details on efficient ways to protect your business equipment.

If you have any questions about your existing policy, are inquiring information about a possible future policy or need further information, please call us at (631) 738-7300 or get a quick quote at www.vrpinsurance.com

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