Equipment Breakdown Insurance

With equipment breakdown insurance, Calgary businesses are covered against the breakdown of mechanical or electronic equipment. Eliminate the risk of your equipment breaking down and have the peace of mind of knowing that your operation will run smoothly.

This policy includes coverage for the breakdown of mechanical or electronic equipment, as well as the explosion of a pressure vessel. As a manufacturing facility, you want to consider equipment breakdown coverage. Having Calgary equipment breakdown insurance will cover the costs of repairing expensive mechanical or electrical equipment in the event of a breakdown.

Equipment breakdown insurance is also valuable for freezers or coolers in the event that compressors malfunction, resulting in food spoilage inside. Equipment breakdown insurance, also known as boiler and equipment breakdown insurance, is the only form of coverage that will pay to repair the breakdown and replace the spoiled contents inside.

Business owners sometimes assume they don't need Calgary equipment breakdown insurance if they don't use specialized equipment such as production line machines. That's actually a misconception—in fact, most businesses need the insurance protection of equipment breakdown insurance. This type of coverage applies to certain equipment that almost all businesses rely on, such as HVAC systems. If you own a retail store, for example, and your HVAC system grinds to a halt the week before the winter holidays when it's -30 degrees Celsius in Calgary, you won't be able to keep your business open unless your furnace is repaired promptly—and that's where Calgary equipment breakdown insurance comes into play.

Industries in Alberta that Need Equipment Breakdown Insurance

A number of different types of businesses and professionals require Calgary equipment breakdown insurance coverage in order to operate safely and efficiently. These include:

• Contractors and skilled tradespeople who use specific tools
• Restaurants and bakeries that use fridges and kitchen equipment
• Property owners with alarm and security systems
• Warehouses and manufacturers that require machinery for operations
• Hospitality businesses that rely on HVAC systems to keep customers happy

Why Equipment Breakdown Coverage is Necessary

No matter what type of business you run, you likely have at least some equipment that is necessary to get the job done—either because you directly need equipment to provide your services or manufacture your products or because you indirectly need it to keep your employees productive and your customers or clients happy. But as we all know, no type of machinery and equipment, whether digital or analog or some combination of both, is impervious to frustrating problems like a mechanical failure or accidental breakdown that can leave you scrambling to figure out how you'll fill the gap until you can get your necessary equipment repaired or replaced.

When you have a robust Calgary equipment breakdown insurance policy on your side, you don't have to worry about the eventuality of a frustrating equipment breakdown causing you unexpected financial setbacks. Speak to a reliable equipment breakdown insurance broker at Krywolt Insurance today to find out more about Calgary equipment breakdown insurance coverage.

Incidents and Perils Covered By Calgary Equipment Breakdown Insurance

It's important to note that only specific causes of damage are covered by your machinery breakdown insurance policy. For example, fire and flood damage would not be protected against by this type of insurance coverage. Likewise, theft would also require a different insurance policy. Be sure to speak with your Krywolt Insurance broker about the different ways you can protect your company’s machinery and equipment when you reach out to discuss Calgary equipment breakdown insurance.

Some of the different types of damage that are protected against with your Calgary equipment breakdown insurance coverage include:

• Operator error
• Electrical shorts
• Power surges, such as high voltage, into the electrical system
• Loose cable or wire connections
• Loss of vacuum or pressure
• Moisture or condensation that damages circuits, wires or other components
• Rupture of a pipe caused by centrifugal force or spinning
• Motor failure
• Explosions, including steam pipes, steam turbines, steam boilers and steam engines

Equipment Issues That Are Covered By Calgary Equipment Breakdown Insurance

Machinery breakdown insurance in Alberta covers a wide range of equipment. This kind of insurance policy safeguards against damages due to power surges, electrical shorts, mechanical breakdowns, motor burnout and operator errors. Essentially, any internal issue that could cause damage to your equipment is covered by equipment breakdown insurance coverage.

For example, any of the following would be protected according to your insurance policy.

• Mechanical Breakdown: Mechanical equipment that would be covered under your Calgary equipment breakdown insurance policy includes motors, engines, generators, elevators, water pumps and specialized manufacturing equipment.
• Computers and Communication System Failure: If you have a power surge that damages your computer systems, phone systems or voicemail systems, this would be covered by your policy. Note that it does not cover non-physical damage such as a virus.
• Problems with Air Conditioning Systems: This would include air conditioners that are used by tenants in your building.
• Problems with Refrigeration Systems: If you run a commercial kitchen and rely on refrigerators and freezers to store a significant amount of food, it's essential that you have equipment breakdown insurance.
• Electrical Breakdown: This would cover issues with electrical panels, transformers, and cables. For instance, say a fuse blows and damages the electrical panel in your business.
• Damage to Boilers and Pressure Equipment: Examples of pressure equipment that you should have adequately insured in the event of a pressure system breakdown include autoclaves, compressed gas cylinders, compressors and vacuum chambers. This would also extend to water heaters and steam boilers.
• Breakdown of Security Systems: Alarm systems are key for many industries, but this is especially true if you're responsible for your tenants' or renters' security systems.
• Alternative/Renewable Energy Systems: Even solar panels and wind turbines can be protected with your Calgary equipment breakdown insurance coverage.

We've established the type of equipment that can be protected in the event of an internal disruption that damages your machinery. But what exactly does a Calgary equipment breakdown insurance policy cover? Continue reading to discover why machinery insurance is so important.

Replacement Costs

If your machinery is damaged beyond repair, having machinery or equipment breakdown insurance will cover the cost of replacing the affected equipment. This way, you are able to get back to business as usual in a prompt fashion—without being financially crippled by the cost of expensive equipment—with coverage from your equipment breakdown insurance policy.

Business Income Losses/Business Interruption

If you work in an industry that relies upon your equipment, such as a bakery, then losing access to that necessary equipment due to a malfunction or accidental damage can not only greatly impact your daily operations, it can put you out of business. With the right Calgary equipment breakdown insurance policy, your loss of income will be supplemented until you are back on your feet—and have a new machine, so you're able to get back to business. Talk to your Krywolt Insurance broker today to learn more about your options and additional coverage options to protect against financial losses.

Spoiled Inventory

It can be heartbreaking when your fridge stops working, and you wind up having to throw away spoiled inventory. If you work in the hospitality industry, you know how much your food cost margin can make or break your business. Having a Calgary equipment breakdown insurance policy that includes spoilage coverage can help ensure that in the event of a mechanical or equipment failure that results in you having to throw away spoiled inventory, you are protected from that financial loss and are reimbursed for the cost of your inventory.

Property Damage

If your heavy machinery breaks or even explodes, it can cause serious damage to your property and that of other businesses nearby. With Calgary equipment breakdown insurance coverage, you will be reimbursed for the cost of repairing or replacing any damaged objects. This type of Calgary equipment breakdown insurance coverage will also ensure that you're protected against any liability you may face if your neighbouring business decides to sue over damage to their commercial buildings or property or if anyone was injured during the incident.

Relocation Costs

Sometimes, claims under equipment breakdown insurance policies will also cover temporary moves. This is typically for commercial property owners whose tenants require relocating after malfunctioning machinery causes their units or homes to be uninhabitable—say, the building has a loss of heating, air conditioning or electricity.

That said, business owners can benefit from this coverage as well. If the damaged machinery also means your employees can't work at your usual site, this will cover the cost of having production or operations occurring at an alternate location.

Do you have questions about Calgary equipment breakdown insurance? Give us a call at Krywolt Insurance to speak with a qualified commercial insurance broker and find out more about what equipment breakdown coverage can offer your business.

Is Having Calgary Equipment Breakdown Insurance Coverage the Same as Having Boiler and Machinery Breakdown Insurance Coverage?

Yes, and no. Equipment breakdown insurance is a newer form of boiler and machinery breakdown insurance—so it has broader coverage. Initially, boiler and machinery insurance was introduced when steam boilers were the primary source of industrial power. Today, this is no longer the case. Many businesses rely on electricity and renewable energy sources like solar and wind power. Additionally, businesses today use a wider range of equipment, which is also covered by this policy. Be sure to ask our Krywolt insurance brokers whether this type of business insurance would apply to your business, or what your options are in regards to your Calgary equipment breakdown insurance coverage.

What Financial Losses Does Calgary Equipment Breakdown Insurance Cover?

This type of policy will cover many of the financial costs that occur as a result of equipment and machinery breaking down. This includes but is not limited to, repairs, inventory losses and business income losses. Be sure to read your policy carefully, or speak to one of our Krywolt Insurance brokers, to ensure you understand the specific details and limits of your Calgary equipment breakdown policy.

How Much Does Calgary Equipment Breakdown Insurance Cost?

The cost of getting Calgary equipment breakdown insurance for your business varies based on a variety of factors, including:

• The size of your business
• The industry you work in
• The specific equipment you have
• The annual income of your business
• The types of coverage included in your policy
• Your claims history

What Types of Accidents are Covered by Calgary Equipment Breakdown Insurance?

Your Calgary equipment breakdown insurance policy will cover any accidents that cause damage to your equipment and/or machinery that are caused internally—such as in the event of an explosion in a steam boiler or a mechanical breakdown of manufacturing equipment. This is different from damage caused by external forces, like a fire, flood, hail or theft. In those cases, the subsequent losses would need to be covered by your commercial property insurance policy. Typically, your equipment breakdown insurance policy will specifically state what perils are not covered, such as most natural disasters. Be sure to read through your policy carefully so you understand what is or isn’t covered by your equipment breakdown insurance. Calgary business owners can also reach out to our Krywolt insurance experts with any questions you may have about your policy coverage.

What are the Key Exclusions to Equipment Breakdown Insurance Coverage?

The most important exclusion you should be aware of when it comes to your Calgary equipment breakdown insurance policy is wear-and-tear. Issues like improper maintenance leading to a breakdown, rust, decay, pest damage, old age, and issues due to outdated computer systems will not be covered by your Calgary equipment breakdown insurance policy. It's important to talk to your Krywolt Insurance broker to determine what is considered wear-and-tear for your industry.

Doesn't My Commercial Property Insurance Cover Equipment?

Yes and no. Commercial property insurance and equipment breakdown insurance both offer you insurance compensation if you need to replace or repair equipment. The difference between these two types of insurance coverage lies in the kinds of damage they are applicable to. Your commercial property insurance policy will cover damage caused by external forces, like a flood, fire or natural disaster, or theft and vandalism loss or damage. However, Calgary equipment breakdown insurance specifically covers damage caused by internal forces. This includes mechanical breakdowns, motor burnout, operator error, electrical shorts etc.

Suppose a fire breaks out in a neighbouring building and spreads to your commercial property, where it destroys your building's HVAC system. In that case, you'll need to file a claim on your commercial property insurance policy to get the HVAC system (and probably many other components of the building) restored or replaced. But if your HVAC system experiences a mechanical failure and stops working altogether, you will need to file a claim on your equipment breakdown insurance policy to get the necessary compensation to have it repaired or replaced.

Because of the key differences in terms of coverage, you should take care to familiarize yourself with the details of your insurance policies, so you understand what covers what in the event you need to make a claim. Our team of brokers at Krywolt will be happy to answer any questions you may have about the details of your insurance policies.

Does Equipment Breakdown Insurance Cover Services That Require Equipment?

No, it doesn't. Equipment breakdown insurance only provides you with insurance compensation to assist with the costs of repairing or replacing equipment that has suffered a breakdown caused by internal forces such as a mechanical issue or electronic problem and potentially provides coverage for income loss that results from such a breakdown. It does not insure the services you provide with your equipment in a liability sense, meaning if you have legal action brought against you for something like failing to provide promised services, your Calgary equipment breakdown insurance will not apply to your legal expenses and settlement costs.

For example, if you run a catering business and your commercial refrigeration system breaks down, your machinery breakdown insurance will provide you with the funds necessary to handle the repair or replacement costs involved with getting your refrigeration unit up and running again, as well as compensation for the income you lost while you were unable to work due to the malfunction, and the cost of food that was spoiled by the lack of refrigeration. But if a customer sues you because you were unable to fulfill your contract with them due to the breakdown, your Calgary equipment breakdown insurance will not cover the cost of litigation and legal settlements. That type of insurance coverage requires commercial general liability insurance or, in some cases, professional liability insurance. Ask our brokers about your different options for liability insurance today!

Is Calgary Equipment Breakdown Insurance the Same as a Home Warranty?

No. A home warranty is a separate product that's usually sold separately from your property insurance. However, Calgary equipment breakdown insurance is generally offered as an upgrade to your homeowners insurance policy. Much like how you can protect your commercial equipment, you can do the same in your home. This may be useful if you've invested in cutting-edge appliances or rely on using your computer for work. It's also a good idea if you have invested in home systems such as a climate-controlled wine cellar. Our insurance brokers will be happy to discuss the differences between a home warranty and equipment breakdown insurance with you, along with how they would apply to your situation.

Is there a Difference Between Equipment Breakdown Insurance Coverage and Contents Coverage?

Yes. Contents coverage protects your property—including any equipment, machinery and/or computers you have at your business premises—from damage due to external factors. It's usually included as part of your commercial property insurance policy. Unlike Calgary equipment breakdown insurance, it does not cover internal factors that cause your machinery and/or equipment to malfunction or break down.

Do I Need Business Equipment Breakdown Insurance Coverage if I Already Have a Warranty on My Equipment?

Typically, yes. While you're usually offered a warranty when purchasing costly equipment and machinery, there are often limits set on the warranty. This is why it's very important to familiarize yourself with what is and is not covered by the warranty. It's common for small business owners to decide they don't need Calgary equipment breakdown insurance coverage because their equipment is still under warranty—only to discover they made a very costly mistake. For example, warranties don't usually protect against operator error that results in damage. Likewise, if your warranty expires without you realizing it, you could find yourself in serious financial trouble if you have to replace expensive machinery critical to your business operations out-of-pocket.

Because of this, our Kyrwolt insurance brokers will recommend that you get a Calgary equipment breakdown insurance policy regardless if your equipment is still under warranty. This will ensure that you are protected from any gaps in warranty coverage in the event of the worst case scenario.

What Other Types of Insurance Should I Have Besides Equipment Breakdown Insurance?

If you're a business owner in Calgary, regardless of the size of your operation, it's integral that you have adequate coverage to protect your business from a worst-case scenario. In addition to adding equipment breakdown coverage to your policy, you should also consider the following types of business insurance coverage:

• Commercial General Liability Insurance: This policy protects you and your business from a loss in the event you are accused of causing bodily harm or property damage to a third party.
• Product Liability Insurance: This coverage safeguards against liability claims due to a malfunctioning product.
• Professional Liability: If you provide professional advice that winds up causing your client harm, they may try to sue you. This insurance policy protects against a subsequent lawsuit.
• Commercial Property Insurance: Your brick-and-mortar property is integral to your operations. Protect it, and any tools, equipment and technology on its premises, with the right coverage.
• Commercial Auto Insurance: If you or your employees use company vehicles to conduct business, they should be insured with a commercial auto policy.
• Cyber Risk and Data Breach Coverage: Keep confidential client and financial information safe from hackers with this insurance policy.

If you are unsure about how much coverage or what type of business or commercial insurance coverage you need, our Krwolt insurance brokers will be happy to help you craft the perfect policy based on your unique business needs.

How Do I Add Calgary Equipment Breakdown Insurance to My Policy?

Generally, you should be able to add Calgary equipment breakdown insurance as an endorsement. However, if you operate a large business, you may need a standalone policy.

Whatever the case may be, when you talk to your dedicated broker at Krywolt Insurance, we will work with you to establish what policy is best for your business's unique needs. As a family-run business that has been serving Calgarians since 1952, we know what it takes to adequately protect your business from the many pitfalls that could cause a financial loss. We will take the time to find the best coverage for your business’s needs.