Chapter 10 - Equipment Breakdown Insurance

Equipment Breakdown: Exclusions Some exclusions are listed in definitions ofo Breakdown (a bit technical)o Covered equipment (e.g., vehicles, items that need to be replaced periodically) Exclusions similar to BPP exclude losses caused byo Ordinance or law (if no coverage under equipment breakdown)o Earth movement or watero Nuclear hazard and war/military actiono Wear and tearo Mold and neglect Exclusions because of other available coverageo Combustion explosion (generally covered under BPP)o Breakdown caused by other perils (lightning, windstorm, etc.)Limits of Insurance Most often, one limit applies for all coverages per breakdowno Suggestion is to set limit equal to value of property at premises For each insuring agreement, separate limits may also be showno May list “Included” which makes that coverage part of the policy limit, not in addition tothe limit Coverage is limited to $25,000 for:o Spoilage caused by ammonia contaminationo Consequential loss for undamaged propertyo Replacement, reprogramming, and/or research for restoring computer datao Cleanup of hazardous substanceso Damage to property from water $15,000 limit for mold caused by breakdownDeductibles Unless indicated as “Combined” is on declarations page, deductibles apply to each insuringagreement separately Four types of deductibleso Dollar deductibleso Time deductibles are used for business income and extra expenseo Multiple of daily value is alternate to fixed elimination periods• Daily value (or average daily value, ADV) is the lost income per day of shutdowno Percentage of loss (subject to some minimum)• Often used for spoilage