Many companies depend heavily on pieces of equipment that enable or support business-critical activities. Having such an asset fail at an inconvenient time can lead to costs far in excess of those required to put the equipment back into service.
A relatively new type of business insurance called “equipment breakdown coverage” can make things a lot easier in such cases. As a fairly novel option, equipment breakdown coverage is not always familiar to business owners. A quick look at the five most common questions about this type of coverage will reveal that things are simpler than they might seem.
- How Do I Obtain Equipment Breakdown Coverage?
Most companies that provide insurance to businesses now offer equipment breakdown coverage. The simplest way to look into the options will normally be to work with an independent agency like T.S. Peck.
An experienced agent for such a company will then research the equipment breakdown coverage products available from a number of insurers. That will typically be faster and easier than trying to collect a similar number of quotes without professional assistance.
This will often prove particularly helpful given that relatively few businesspeople are deeply familiar with equipment breakdown coverage, in general. Being able to ask questions of an informed agent will make subsequent missteps easier to avoid.
- What Kinds of Equipment are Covered?
Each type of equipment breakdown coverage applies to particular types of equipment. Generally speaking, insurers characterize business-related pieces of equipment as being either mechanical, electrical, computers and telecommunications devices, HVAC components, or boilers.
A business that needs to cover only its boilers and other pressurized equipment will often be better off with a more specialized policy. In most other cases, a company’s assets will simply need to be cataloged and assigned to appropriate groups to enable coverage.
- What Sorts of Breakdowns are Covered?
More common, general sorts of business coverage like commercial property insurance already cover certain sorts of damage to equipment. Equipment breakdown coverage fills in many gaps, though, that could otherwise leave a business excessively exposed to risk.
Most business equipment coverage applies virtually any time an important asset goes out of service for any length of time. Even something as simple as a power outage can count as a qualifying event should the owner of a piece of equipment be confronted with related costs.
In addition to paying to put a piece of equipment back in working order, this type of coverage will also compensate for associated losses. If the failure of a commercial refrigerator causes a restaurant to lose thousands of dollars’ worth of food to spoilage, for instance, business equipment coverage should entitle the company to a payment.
- Is Business Equipment Coverage Cost-Effective?
As with all other types of insurance, business equipment coverage works by spreading risk out among a large number of policyholders. As such, it will not always appear to be cost-effective when assessed according to simplistic metrics like “expected value.”
The real value of business equipment coverage comes from knowing that unlikely but potentially devastating events have been accounted for. Companies that maintain sufficient amounts of business equipment coverage can operate and plan with more confidence.
- How is Business Equipment Coverage Enabled?
In most cases, business equipment coverage will be added as an endorsement or rider to an existing commercial insurance policy. This almost always makes the most sense, since this type of coverage will generally be used to supplement other, more general sorts.
Licensed Agents are Ready to Answer Any Other Questions
Questions like these most often crop up when business owners and others consider obtaining equipment breakdown coverage. Proceeding any further will inevitably give rise to more specific, technical questions that will be best answered by an experienced, licensed insurance agent.