If you have business insurance, you can feel confident your building and property are well protected. But it’s important to make sure you’re also protected in the event your equipment breaks down.

Property policies usually exclude some of the most common malfunctions, including mechanical breakdown, rupture and cracking. Unless you have purchased Equipment Breakdown Coverage, you may have a gap in your coverage, leaving you vulnerable to costly repairs or a temporary loss of revenue.

Nearly everything that is mechanical, electrical or under pressure can be insured for loss due to breakdown, including boilers, air conditioning and refrigeration units, electrical panels, computers and security or telephone systems.

What is Boiler & Machinery Insurance?

Boiler & Machinery Insurance is a form of property insurance. Its purpose is to insure against the financial losses – property damage, business interruption and spoilage losses – that result from defined ‘accidents’ to specified kinds of mechanical, electrical and pressure equipment.

Insured equipment may include such things as steam boilers, hot water boilers, pressure vessels, refrigerating and air conditioning systems, retail scanning equipment, motors, generators, compressors, pumps, engines, fans, blowers, gear sets, turbines, transformers, electrical switchgear, and a wide range of production and processing equipment.

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There are three main reasons why boiler and machinery insurance is important:

1. It fills gaps in other property insurance policies.
2. Insurance company inspections may help reduce the likelihood of accidents to insured equipment.
3. Insurance company inspections of boilers and pressure vessels satisfy the provincial inspection requirements in several provinces.

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Many accidents can be prevented and are usually attributed to human error. Safe operation always requires proper maintenance of equipment. But many operators or owners of equipment don’t know how or don’t take the time to properly care for their equipment.

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Here are a few causes of accidents that can be attributed to human error and lack of proper maintenance:

• Operating equipment beyond its rated capacity
• Misapplication of equipment
• Permitting dust or dirt to build up on electrical equipment
• Failure to protect equipment against vehicle impact
• Deliberately bypassing safety devices
• Relying too heavily on ‘automatic’ devices
• Failure to test auxiliary equipment (e.g. ensuring proper lubrication)
• Improper lay-up or start-up procedures for seasonal equipment

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With Boiler and Machinery Insurance, you will receive comprehensive coverage for the following:

• Pressure Equipment (Boilers, unfired pressure vessels, piping)

Examples: Cast iron boilers, fired coil water heaters, autoclaves, air receivers, etc.

• Mechanical Equipment (Equipment used to generate, transmit or use mechanical power)

Examples: Compressors, pumps, gears, turbines, fans, blowers, internal combustion engines, etc.

• Electrical Equipment (Equipment used to generate, transmit or use electric power)

Examples: Electric motors, generators, transformers, miscellaneous electrical apparatus (switchboards, cables, circuit breakers)

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• Production Machines (Machines or apparatus which process, form, cut, shape, grind or convey product and maintenance machines)

• Examples: Hydraulic presses, extruders, paper machines, lathes, mills, etc.

• Electronic Equipment (Television, radio or telephone equipment; medical or scientific equipment; data processing, computing, duplicating or other office equipment)

Examples: Television transmitters, x-ray machines, computers, bar code scanners, etc.

For more information on Boiler & Equipment Breakdown Insurance, talk to your agent.

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