If ever a disaster should strike, it is important to be prepared. The potential impact of unexpected damage or loss to your equipment can easily catch anyone off guard, so it is crucial to be ready to act if your business operations are jeopardized.
While you may think you are ready for a situation involving equipment breakdown, you may not be fully aware of the associated risks. You may also be unaware of the benefits of having the right insurance. Below we de mystify the investment necessary to maintain an effective operation.
FACT: I should review a few different companies before purchasing Equipment Breakdown Insurance.
Not all insurers are the same, so it is important to speak to a few companies to find the one that best meets your needs. Look for an organization that has demonstrated experience, is known for its reputable service standards, and brings knowledge of your operations and area of expertise.
Talk to your broker and ask for an insurer with the expertise to address your specific concerns. When it comes to finding the right insurance policy, make sure you are dealing with an insurance broker who understands the business you’re in and what you specifically need in order to maintain viable operations.
They should also have a good knowledge and understanding of what types of insurance products and services are available and what your options are not only from a pricing standpoint but a quality and reliability perspective.
FICTION: I don’t need equipment breakdown insurance if I don’t have a boiler.
This thinking steers many business owners away from equipment breakdown insurance, but the coverage is not confined to boiler explosions. It also protects against the breakdown of mechanical, electrical, mobile and production equipment and any resulting spoilage, giving you and your company a security blanket should the unexpected occur.
Equipment breakdown insurance is a safety net for accidents ranging from mechanical, electrical, and production equipment failures, in addition to boiler explosions, and includes important risk control services that can uncover dangers before they become major problems.
FACT: Equipment breakdown insurance should not replace regular maintenance.
Preventive maintenance and extensive personnel training are important to help extend the longevity of your equipment. Failing to keep up with predictive and preventive maintenance can lead to higher wear and tear, which means your equipment is increasingly at risk of becoming ineffective. You might also learn that you need to replace a part that has been discontinued or is not easily obtained.
Your maintenance regimen should include a regularly scheduled preventive program that uses detailed logs to track inspections. Always remember: regular maintenance is far more manageable and affordable than replacing a piece of equipment.
FICTION: If I have a warranty, I don’t need Equipment Breakdown Insurance.
Though warranties are designed to protect your purchases, they seldom have the breadth of coverage necessary to serve you long term. If an outside factor is the cause of your loss — such as temperature extremes, dusty conditions or improper installation – you may be required to pay for the necessary replacements.
When warranties are applicable, they still may not cover the cost to remove faulty equipment from your property or the installation required to get the replacement up and running. Warranties also won’t cover losses associated with business interruption, such as loss of productivity and sales.
Look for Course of Construction Equipment Breakdown Insurance instead, which will provide operational insurance during the construction or installation phase of a project. This way, you are protected from day one.
FACT: Equipment breakdown insurance is a worthwhile investment.
Equipment breakdown insurance is just that: an investment. Since machinery is expensive and because your operation depends on its functionality, it is also a worthy expense.
In addition, taking the necessary steps to ensure you have coverage for both direct damage (repair) and business interruption (time to repair) will actually save you money in the long run if something goes awry.
Louis Vatrt has more than 30 years of experience in the boiler and pressure vessel and machinery industry, with 16 of those years in the boiler and machinery insurance industry.
Visit www.rsabroker.ca for more information. Send comments to editor@dailycommercialnews.com
Recent Comments
comments for this post are closed