The Importance of Equipment Breakdown Insurance Coverage

The Healthcare and Life Sciences industries, like many others, heavily rely on technology. It keeps day to day operations going. For business owners, this means that sudden and accidental loss or breakdown of their equipment may cause large income losses due to both repair/replacement costs as well as falling revenue while the equipment is not usable. Plus, regular operating expenses (payroll, utilities, etc.) need to still be paid, which can become difficult when sales are down.

Whether you own your building or are a tenant or are sharing lab space, protecting your business personal property with the correct commercial property policy is important. You may have purchased a standalone Commercial Property policy or a Business owners’ Policy and have placed a limit of insurance on your important items. You know that you covered for losses due to fire, theft, explosion, vandalism, smoke damage; etc.; however, did you think about those breakdown situations and how it could affect your day to day operations?

Whether it is your computer, diagnostic equipment, refrigeration equipment, production systems, communications equipment or any other type of technology, it can likely be stopped and damaged suddenly by some of the following:

• Power Surges and Electrical Arcing

• Mechanical Breakdown

• Steam Explosion

• Lack of Air Conditioning

• Improper Use

These issues, in turn, can cause some of the following:

• The cost to repair or replace the damaged equipment

• Expenses to expedite new equipment

• Spoilage of items

• Loss of Business Income

Many insurers are customizing Equipment Breakdown policies to enhance the traditional ones with some coverages that take into consideration today’s complex technology. Some of these include Service Interruption Data Restoration, Cloud Computing Service Interruption and Off-Premises Restoration Coverage.

YES, your existing insurance products MAY already provide protection for these. Then again, they may not or they may provide very limited coverage.

My best advice would be to do an insurance “check-up” once or twice a year with an insurance agent that can review your exposures, offer solutions and close coverage gaps. Do not wait until the loss to find out if you are properly covered.

William B. Tarpey

Tarpey Insurance Group, Inc.

https://www.snifeco.com/providers

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