Claim Examples

Equipment is exposed to unique risks that other property is not.  Electrical short circuits, mechanical forces, overload, control failures are just a few of the causes for equipment breakdowns.  Examining some examples of the kinds of losses that can, and do occur, offers solid insight into why equipment breakdown insurance is important coverage for today’s equipment-intensive businesses.

Electrical Losses
Mechanical Losses
Air Conditioning and Refrigeration Losses
Boiler and Pressure Vessel Losses
Business Equipment and System Losses
 

Electrical Losses

Office Building

Electrical arcing destroyed three main electrical panels and left an office building without power.  Temporary measures were taken to restore power to tenants – particularly to an accounting firm that was in the height of its tax season crunch.
Total Loss: $ 1,597,389

Apartment Building

An apartment complex's aluminum electrical supply bus burned out, severely damaging electrical wires and cables.  Angry residents had to be relocated.
Equipment Repair Cost: $ 118,681
Relocation Cost: $ 72,152
Total Loss: $ 190,833

Furniture Manufacturer

Sawdust in an electrical distribution panel severely damaged the interior of the panel.  Overtime was required to make up lost production.
Repair Cost: $ 21,087
Business Interruption: $ 14,600
Total Loss: $ 35,687

Mechanical Losses

Hospital

A turbine generator supplying power to a hospital failed when blades broke and penetrated the engine.
Total Loss: $ 292,513

Printer

A bolt came loose and fell into a high-speed press, damaging the cylinder and gears.
Total Loss: $ 136,693

Machine Shop

A power surge from a utility line damaged two computer circuit boards, halting a metal shearing operation for nearly a week.  Materials and workers were sent to another plant several hundred miles away to meet production requirements.
Repair Cost: $ 9,485
Extra Expense: $ 42,541
Total Loss: $ 52,026

Air Conditioning and Refrigeration Losses

Apartment Building

An air conditioning motor burned out in a high-rise, senior citizen's apartment building.  Ninety-plus degree temperatures necessitated setting up four rented "spot coolers."  Overtime was required to get the motor back on line.
Property Damage: $ 83,557
Extra Expense: $ 16,794
Total Loss: $ 100,351

Food Processor

An ammonia line ruptured when a compressor crankshaft and its connecting rod broke.  Fresh scallops were contaminated with ammonia.  Rental units were needed while the new compressor was installed.
Total Loss: $ 65,289

Medical Clinic

A control failed on a medical clinic's refrigerator, causing the temperature to dive into single-digit temperatures.  Drugs, which normally are stored between 36 to 43 degrees, had to be discarded.
Total Loss: $ 21,953

Boiler and Pressure Vessel Losses

School

Sediment in a boiler caused a low-water condition that resulted in severe over-firing, shutting down the boiler – and a school.  a rental unit was needed until the damaged boiler could be replaced.
Property Damage: $ 98,500
Extra Expense: $ 25,164
Total Loss: $ 123,664

Manufacturer

A faulty circuit in a water pump caused a fire tube boiler to dry fire.  The boiler was severely damaged.
Total Loss: $ 90,600

Church

A section of a boiler and a steam pipe fitting cracked.  Steam damaged the church organ, choir robes, and public address system.
Total Loss; $ 34,969

Business Equipment and Systems Losses

Municipal Building

A power surge damaged a generator, burned out police radio equipment, printed circuit boards for a fire alarm system, a small transformer, and small electric motors.
Total Loss: $ 90,160

Office Building

Electrical power supply voltage fluctuation caused two telephone system terminal boards to burn out.
Total Loss: $ 52,500

Service Station
A power surge damaged a service station's electronics, including the computerized diagnostic system, telephone, paging system and the security system.
Total Loss: $ 33,388