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Business Protection Bulletin

What Is Boiler and Machinery Coverage, and What Are the Advantages?

By May 1, 2014No Comments

Boiler and Machinery policies provide two major services. Insurance in the form of property coverage for damage to buildings, boilers, machinery and additional liability coverage in the event of an explosion. Second, a valuable inspection service for the covered property, which enables mechanical breakdown coverage to be provided.

This coverage is not available under other insurance policies. In many insurance companies, boiler and machinery has been re-titled equipment breakdown to reflect the more modern application.

Mechanical breakdown insurance provides loss of refrigeration coverage for food spoilage, loss of revenue due to emergency generator malfunction, and extra expenses to keep the operation temperature controlled during machinery outages. Good loss control in these matters begins with avoidance – well running machines.

The inspection service meets requirements of local and state authorities. More importantly, the inspector gives solid loss control advice to avoid the breakdown of machines and boilers at inconvenient times. The inspectors review the system as a redundant check on the owner’s own maintenance program. Losing power, heat, cooling, or ventilation creates production problems for any business.

Boiler and Machinery coverage applies to almost any business. The image of huge steam boilers may come to mind, but refrigeration, modern HVAC systems, or emergency power generators should instead. Think turbines, engines, fans, all the gears and shafts which make them work, and any other mission critical machinery. Think about heat pumps, air conditioners, even elevator equipment.

Ask your professional agent to help compile a list of equipment that may be exposed to mechanical breakdown to the detriment of your operations. It is likely that your company has an exposure that is not being properly addressed. With this coverage, the loss to the equipment is secondary to the consequential loss of income or the extra expense brought on by the mechanical breakdown. Your professional agent can help you design the correct coverage.