Equipment Breakdown Insurance is a form of property insurance. Its purpose is to insure against the financial losses – property damage,businessinterruption and spoilage losses – that result from defined “accidents” to specified kinds of mechanical, electrical and pressure equipment (called “objects” in the policy).
Insured equipment may include such things as steam boilers, hot water boilers, pressure vessels, refrigerating and air conditioning systems, motors, generators, compressors, pumps, engines, fans, blowers, gear sets, turbines, transformers, electrical switchgears, electronic equipment and a wide range of production and processing equipment.
Why the Need?
There are three main reasons why Equipment Breakdown Insurance is important:
- It covers exposures that are normally excluded in other property insurance policies.
- Insurance company inspections (which are not obligatory) may help reduce the likelihood of accidents to insured equipment.
- Insurance company inspections of boilers and pressure vessels satisfy the provincial inspection requirements in several provinces.