Broken Promises
Breakdown insurance can assure a quick fix.
It's an old type of insurance with a new name and a growing
need: Equipment breakdown insurance (traditionally called boiler
and machinery insurance) has become an important part of a sound
risk management strategy for all types of companies.
Historically, this specialty insurance covered boilers and
production machinery, explains Mark MacGougan, assistant vice
president for product development with Hartford Steam Boiler Inspection and Insurance
Co. in Hartford, Connecticut. However, says MacGougan, the term
equipment has come to mean much more than that, ranging from
telecommunications systems to cash registers: "The way
technology has evolved, just about every business is more dependent
on equipment than they were even five or 10 years
ago."
The policy can also cover related property damage, lost business
income and other costs incurred due to the breakdown. MacGougan
points out that, for many companies, the cost of lost business due
to a breakdown is much more than the cost of repairing the
equipment. Covered hazards range from electrical-related damage to
mechanical breakdown.
Content Continues Below
An increasing number of small-business insurance policies
include equipment breakdown coverage, but many still do not. Read
your policy, or check with your agent to see if you're covered.
If you're not, or if the coverage is insufficient, shop for a
different package; or consider a stand-alone policy.
Jaquelyn Lynn is a freelance business writer in Orlando,
Florida.