A reader recently asked me to post on boiler and machinery coverage. I was amazed that I had not done so in the past. I thought I had posted on every policy out there. Nope! This will fix that.
The property insurance policy excludes damage from a pressure vessel, artificial electrical currents, or mechanical breakdown - unless fire ensues. In the "olden days" the big coverage exposure was from steam boiler explosions. Over the last twenty years or so, more and more insurers started offering coverage for mechanical breakdown and other "perils of motion and power."
Here are some of the events not covered by most property insurance policies that are covered by machinery policies or by policies that include the peril of mechanical breakdown:
-Boiler loses its water and cracks.
-Boiler explosion
-Lightning strikes down the power line, travels to your building and blows out your power panel.
-A part breaks on a motor causing a compressor failure and "down-stream" damage to your equipment.
-A gearing system fails destroying a conveyor system.
Here is some of the equipment covered by machinery insurance:
-Pressure vessels
-Refrigeration systems
-Pumps and compressors
-Heating and air conditioning systems
-Turbines
-Electronic data processing systems
-Telephone and alarm systems
-Elevator systems
-Engines that utilize electrical or mechanical energy or are under steam pressure
Insurers often provide inspection services along with the insurance coverage. Sophisticated tests can be run to alert you to future failures. Many policies also include coverage for the loss of business income that results from the accident.
Product spoilage can also be included.
The property insurance policy excludes damage from a pressure vessel, artificial electrical currents, or mechanical breakdown - unless fire ensues. In the "olden days" the big coverage exposure was from steam boiler explosions. Over the last twenty years or so, more and more insurers started offering coverage for mechanical breakdown and other "perils of motion and power."
Here are some of the events not covered by most property insurance policies that are covered by machinery policies or by policies that include the peril of mechanical breakdown:
-Boiler loses its water and cracks.
-Boiler explosion
-Lightning strikes down the power line, travels to your building and blows out your power panel.
-A part breaks on a motor causing a compressor failure and "down-stream" damage to your equipment.
-A gearing system fails destroying a conveyor system.
Here is some of the equipment covered by machinery insurance:
-Pressure vessels
-Refrigeration systems
-Pumps and compressors
-Heating and air conditioning systems
-Turbines
-Electronic data processing systems
-Telephone and alarm systems
-Elevator systems
-Engines that utilize electrical or mechanical energy or are under steam pressure
Insurers often provide inspection services along with the insurance coverage. Sophisticated tests can be run to alert you to future failures. Many policies also include coverage for the loss of business income that results from the accident.
Product spoilage can also be included.
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