Texas Associates Blog

What to do when you business equipment breaks down?

We often times take our working business equipment for granted. When something breaks down, however, we find ourselves in a state of panic and work brought to a sudden standstill. There are a number of things that can cause equipment to breakdown, from a power surge damaging your network, to an employee error. Equipment breakdown insurance protects against breakdowns caused by power surges, motor burnout, boiler malfunction, and operator error.

Coverage

Protection provided by equipment breakdown insurance can pay for:

• The cost to replace spoiled stock or materials
• Costs associated with the time and labor to repair or replace equipment
• The cost to repair or replace the damaged equipment
• Other expenses due to limit loss or speed restoration

Cost

The cost of equipment breakdown insurance depends on how much you buy. When determining the amount and limits of coverage you will need, it’s important to consider all the possible situations that could occur, not just the face value of the equipment being covered. For instance, what if you experience property damage as a result of equipment breakdown? What if your business has to shut down for a certain period of time? You can begin to imagine how breakdown losses can start to add up.

Property Insurance and Warranty

The majority of standard property insurance policies do not provide insurance for equipment breakdown. Likewise, warranties only cover so much.

Warranties are restrictive. They will typically only cover new equipment for a certain amount of time, and only for specific type of breakdowns and failures. Also, warranties will not pay for lost business income or equipment damage due to operator error. Unfortunately, operator error is the cause for many equipment breakdowns.

Whether or not you choose to insure your business equipment is ultimately up to you. Depending on the size of your business and value of your equipment it may be wise to purchase additional equipment breakdown insurance to go along with your property insurance.

If you have questions about equipment breakdown insurance, ask an expert here.