Equipment breakdown for businesses
Modern businesses rely heavily on technology. So, when a critical piece of equipment breaks down, it can bring production - and income - to a halt. This equipment often contains highly sensitive technology, which can be damaged by something as common and sudden as a power surge. These are some real-world examples of equipment breakdown risks businesses face today - and the impact they've had.
Real incidents, real claims
Food packaging facility
A packaging plant鈥檚 refrigerated egg storage tank was damaged during the cleaning process, causing the tank to implode. The entire unit needed to be replaced.
Total loss: $72,778
Wholesaler
A wholesaler experienced a power surge transmitted through a local area network, which caused damage to 200 computers.
Total loss: $124,672
Electrical distribution center
Electrical arcing occurred in an electrical distribution center supplying a clean room. Fumes from overheated wire insulation required that the room be shut down for two months for cleaning and repairs.
Total loss: $2,670,000
Cloud-based service provider
A lapse in an AC system caused a cloud-based service provider's servers to overheat. As a result, the scheduling and billing department for a medical center was unable to conduct business for one week.
Total loss: $11,425
Product offering
With 华体会's equipment breakdown coverage, your clients receive all of the protection, services and benefits associated with traditional coverage, along with a variety of coverage engineered to address today鈥檚 modern equipment risks.
Equipment breakdown coverage
Protects against the costs resulting from sudden and accidental physical damage to equipment that requires its repair or replacement, caused by:
- Short circuit
- Electrical arcing
- Power surges
- Motor burnout
- Boiler damage
- Mechanical breakdown
Microelectronics coverage
Covers failures that require microelectronics to be replaced whether or not such equipment shows signs of physical damage.
- Triggered when covered equipment suddenly stops functioning as it had been and that equipment or a part containing electronic circuitry must be replaced
- No special sub-limits or deductibles 鈥� pays just as if there had been an equipment breakdown accident
Cloud computing service interruption
- Adds cloud computing services to service interruption coverage
- Triggering outage must exceed appropriate waiting period
- Subject to service interruption sub-limit and deductible
Service interruption data restoration
- Data restoration coverage for lost data when there is a covered service interruption
- Triggering outage must exceed appropriate waiting period
- Data may be at the insured location or in the custody of the insured鈥檚 cloud computing service provider
- Subject to data restoration sub-limit
Off-premises business income, extra expense and data restoration coverage
- Extends payment for off-premises equipment breakdown to include business income, extra expense and data restoration,in addition to physical damage
- Sub-limits up to $5,000
Public relations coverage
- Pays for public relations assistance to help manage a reputation that may be damaged by an interruption of business
- Applies if there is a covered loss of business income
- Sub-limits up to $5,000
Common equipment risks
Here are seven of the most common equipment risks:
- Air conditioning and refrigeration
- Air conditioning and refrigeration systems have numerous components that can break down, leading to property damage and costly repairs.
- While property damage can cost thousands, a refrigeration breakdown can cause business interruption and spoilage, and lack of air conditioning can result in lost sales, requiring temporary equipment rental or relocation during repairs.
- Boilers and pressure vessels
- Boilers and pressure vessels serve multiple purposes such as heating, hot water, cooking, sterilization and production.
- A breakdown of a boiler or pressure vessel can impact your business operations and may require the extra cost of renting temporary equipment to restore operations.
- Computers and communications
- These types of systems are vulnerable to power surges, loose connections, vermin, foreign objects, excessive moisture and improper use.
- The failure of computers and communication equipment can lead to business interruption, loss of income and expensive repair or replacement costs.
- Electrical
- Electrical panels and cables are interconnected, so a short circuit in one part can spread and destroy a large part of the system.
- Electrical systems present a huge loss potential since the systems represent a significant percentage of a building's total value - up to 15% on some cases.
- Mechanical
- Buildings house various types of mechanical equipment, including pumps, motors, fans, conveyors, and engines, which can be costly to repair.
- Mechanical breakdown of this mission-critical equipment can lead to lost income and business interruption.
- Production
- Modern production systems use electronics and software to optimize production and energy efficiency.
- Power surges that damage electronics or disrupt information flow can render the system inoperable. Modern systems with sensitive electronics require skilled specialists to repair, and replacements may need to be custom-made or obtained from abroad.
- Renewable/alternative energy
- Renewable and alternative energy technology includes solar, wind, geothermal, and bio-fuels, often involving various electrical and mechanical equipment.
- The growing demand for more efficient equipment in this field may lead to longer lead times for repair and replacement.