Equipment Breakdown

Every day businesses from large to small rely on their mechanical and electrical equipment to maintain their operations.  No business can afford losses to this equipment which may originate within mechanical, electrical or pressure equipment.

Although more common than fire these equipment failures are not typically covered by Commercial Property policies.  Equipment breakdown coverage responds to the cost to repair or replace mechanical, electrical or pressure systems equipment that suffers a breakdown.  Indirect losses arising from a covered Equipment Breakdown can result in additional losses; such as business interruption, extra expense and spoilage.

Equipment Breakdown coverage provides the financial protection you need to run your business and continue to meet customer demands without worry.

• Boiler and Pressure Vessels – Payment of Certificate Fees

Erie and Niagara Insurance Association, in partnership with its equipment breakdown reinsurer, Mutual Boiler Re, pays for its insured’s boiler and pressure vessel certificate issuance fees and inspection costs in New York.  Most other insurance companies collect these certificate fees from their insured clients.

Certificate fees per boiler or pressure vessel cost $100 and are billed by the jurisdiction for issuing certificates.  The certificates are issued based on a satisfactory inspection report submitted by an inspector.  These certificates indicate a boiler or pressure vessel complies with the rules and regulations of the jurisdiction and is permitted to operate until the certificate expires.

Helping to keep our insured’s compliant with jurisdictional law is just one of the ways we make it easy to do business with Erie and Niagara Insurance Association.  Contact your agent for more details.

Following are some examples of covered equipment breakdown losses:

• An insured lost power on his/her property during a storm.  When power was restored, the air cooling system in the poultry house was electrically damaged.  The artificially generated surge burned the motor windings.  The cost to replace the air cool system was $695.  The insured needed to hire an electrician to connect and rewire the new equipment.  The electrician charged $240 for three hours of labor.  The total cost to replace the system was $935.  Following application of the $500 deductible, the insured was paid $435 for the claim.
• An air conditioning unit sustained an ice buildup in the evaporator due to a cracked compression fitting.  The ice plugged the condensate drain causing water to leak into the control cabinet, short-circuiting the controls for the A/C unit.  The total cost to repair was $2,800.  Following application of the $500 deductible, the insured was paid $2,300 for the claim.
• The upper seal lock on a pump broke allowing the motor to fill with oil.  The pump was removed and cleaned upon which it was discovered the stator of the electric motor driving the pump was cracked.  Replacing the motor made it necessary to rewire the panel.  The total cost to repair was $2,843.  Following application of the $500 deductible, the insured was paid $2,343 for the claim.