Equipment Breakdown Coverage was originally created for businesses with large systems and machinery needed for operations and manufacturing. These days, almost every business has some equipment breakdown exposure. Mechanical breakdown and electrical damage are common occurrences, and can lead to severe interruptions in business. Many businesses have maintenance programs, equipment warranties, and service contracts; all of which are good backup plans, but not the best recovery method after a major loss.
There are various causes of equipment breakdown, such as:
- LED lighting surges
- Excessive moisture
- Insulation deterioration
- Overload conditions
- Lubrication failure
- Improper repairs
- Poor connections
- Foreign material affecting electrical circuits
A standard business property policy excludes coverage for artificially generated electrical currents, mechanical breakdown, and explosions, whereas an Equipment Breakdown Policy is designed to fill in these coverage gaps and more should your business require them. It can even cover server breakdown or POS system damage, and with computer-based automation becoming more and more prevalent, this can be a lifesaver for most businesses.