Boiler and Machinery and Equipment Breakdown
Equipment breakdown
Equipment breakdown (formerly boiler and machinery) covers sudden and accidental breakdown of covered equipment - boilers, pressure vessels, mechanical and electrical equipment, and computers. It responds to mechanical breakdown, electrical arcing, short circuits, and pressure-vessel rupture, which are typically excluded under property forms.
Key concepts
- Object means the specific equipment insured; coverage is often scheduled.
- Jurisdictional inspection requirements apply to boilers and pressure vessels.
- Spoilage coverage protects perishable goods from temperature change due to equipment failure.
- Business income and extra expense can be added to equipment breakdown.
- Exclusions: wear and tear, corrosion, erosion, fatigue, and improperly maintained equipment.
Traps to watch
- A boiler explosion is often excluded under the property form and covered under equipment breakdown - do not double-count.
- Breakdown due to lack of maintenance is excluded; sudden accidental failure is covered.
- Computer equipment may be covered, but data loss is usually limited to the cost of reproducing records.
Rule of thumb
If the loss involves the failure of equipment itself (not an external peril), think equipment breakdown, not fire or special form.
Worked example
A compressor motor burns out from an electrical short, halting production for a week. The property special form excludes mechanical breakdown; the equipment breakdown policy covers the motor repair and the resulting business income loss if that extension is purchased.