Equipment Breakdown Insurance Helps Keep Businesses In Production

Manufacturers and other commercial interests have a great need for equipment breakdown insurance so they do not go out of business if a critical piece of equipment fails at the worst of times. There are a lot of perils that can cause equipment to fail, including power surges, short circuits, operator errors and a slew of other causes. A good machine breakdown insurance plan can help repair or replace equipment as well as lost inventory and production so a business can stay afloat and keep its employees working.

Formerly called boiler and machinery insurance, the machine breakdown insurance not only can repair or replace damaged equipment, it also can repay the costs and time lost for repairing or replacing it. And when businesses suffer interruption in their production cycles, they can lose a great deal of money. But the right coverage can replace those financial losses and help make the next payroll.

Equipment breakdown insurance also can help pay the costs of taking action to prevent additional damage. For example, if a business has a lot of frozen stock and a freezer unit breaks down, it might have to transfer goods to another location, pay double time or even triple time to have a new unit installed or take other action to avoid a total loss of stock. The cost of that action could be recouped through a good insurance policy.

Even leased equipment and goods can be protected with some breakdown insurance coverage. A retail shop specializing in frozen foods or fresh fish, for example, might be located in a rented retail space, and if there is a power outage, internal flooding or some other peril that falls under the landlord’s responsibilities, a good insurance plan can help recoup the cost of any losses.

And if an equipment problem happens away from the business location, a good machine breakdown insurance plan also can pay the costs of staying in business and replace most or all of the financial loss. Most standard commercial property insurance plans will not cover losses when equipment breaks down, especially away from the premises, and product warranties can be very limited on which costs they will reimburse. But equipment breakdown insurance can be exactly the tool needed to keep production going.

Buying breakdown insurance plan requires a careful study of business needs, logistics and potential costs of equipment failures of various types. Choosing the right amount of coverage can be a very difficult task for most business owners, so most property and casualty insurance companies offering commercial insurance products suggest carefully assessing coverage limits when buying a machine breakdown insurance plan. That means looking over transportation needs and potential costs, labor costs, the cost of transferring goods to another location and a myriad of other potential difficulties.

Buying equipment breakdown insurance coverage is a task many businesses tend to overlook, but when something breaks down and a business is in danger of going bankrupt, those that have machine breakdown insurance coverage are relieved. By Mike Heuer