Understanding Equipment Breakdown Insurance: Protection for the Manufacturing Industry

Written By Charlotte Insurance on September 5, 2023. It has 0 comments.

Understanding Equipment Breakdown Insurance Protection for the Manufacturing Industry

The manufacturing industry isn’t like it used to be. Instead of workers standing at various assembly line stations wielding wrenches, hammers, and other manual tools, everything now consists of conveyor belts, robotic machinery, computer-controlled tools, and more. Manufacturing relies on these pieces of equipment so heavily that if they went down for more than half an hour or so, there would be huge financial losses to deal with. Thankfully, there’s an insurance protection that manufacturing companies can choose to put into place: equipment breakdown insurance.

What is Equipment Breakdown Insurance?

Equipment breakdown insurance is exactly what the name implies. It’s insurance coverage for when your manufacturing equipment breaks down and can’t be used to stamp out parts, cut steel or other metals, or anything else that your business does. This downtime can be expensive, especially when you factor in the wages being paid out even though the equipment isn’t working. Add in the costs of new parts, as well as a repair person or two, and you have quite a bit of money going out the door when new items aren’t being made to replace it.

Thankfully, equipment breakdown insurance can save the day.

What Does Equipment Breakdown Insurance Cover?

Even though the name of the insurance tends to lead you to believe that it covers all types of breakdowns and associated costs, this isn’t entirely true. Equipment breakdown insurance usually covers:

  • Mechanical and Electrical Parts – This includes the essential parts that make the machinery move, such as pumps, rotors, engines, motors, and more, as well as the electrical panels, transformers, and generators that provide it with power.
  • Temperature Control Mechanisms – If the system needs to be at a certain temperature in order to work properly, and that part of the machine has broken, then it may be covered by the insurance. In addition, the equipment that keeps your office and manufacturing floor warm and cool, such as the boiler and air conditioner, are included here as well.
  • Computer-Based Systems – Everything from hardwired fire alarms to overhead lighting, plus phone and voice mail systems, computer systems, and more fall into this category. Security systems do as well.

What Can My Equipment Breakdown Insurance Be Used For?

If you have equipment breakdown insurance and need to use it, due to broken essential machinery, then it can be used to help with:

  • A Lack of Income – Any lost income due to the equipment failure may be covered by the policy.
  • Equipment Replacement or Repairs – The cost of replacement equipment, or if the machine can be fixed, the parts and labor required for the repairs, are often covered by insurance. Any other related expenses might be covered as well.
  • Any Damaged Inventory – If you operate a manufacturing center that creates parts or food that need to stay at a certain temperature and the heating or cooling equipment goes down, then you might be reimbursed for the damaged inventory.

Have Questions? Contact Charlotte Insurance

If you think your business qualifies for equipment breakdown insurance and want to learn more, contact Charlotte Insurance. Our agents can explore and explain all available options to you and put together the insurance coverage plan your business needs.

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