Equipment Breakdown Insurance & Construction BOPs
There is nothing as frustrating as the delays caused by equipment failure. They always seem to occur at the most inopportune times –usually in the middle of a big project. Throw out your deadlines. Throw out your schedule. Call the subcontractors that were supposed to start tomorrow, and tell them to sit tight for a week. Everything is on hold until you can get that equipment back up and running. While there is no way around random equipment failure, it is a lot easier to handle when you have the insurance to help cover the costs.
The Role of Equipment Breakdown Insurance
There’s an old adage among contractors that once you figure out how long a project should take, you have to double or triple it a few times to figure out how long it will actually take. While this might be an exaggeration, each contractor recognizes the implied truth. The problem with equipment failure is that it brings work to a halt. As the owner of a construction company, you can practically feel the money draining out of your pockets during the delay. In addition to the lost income, you have to pay for the actual repairs or replacements. This is exactly what business equipment insurance is for. It eliminates the risk of losing big, by covering your equipment repair costs and compensating you for lost income resulting from the delay.
What Does Equipment Breakdown Insurance Cover?
While there is some variation between policies, equipment insurance will normally protect you from most reasons for breakdowns such as: power surges, power outages, failed motors, and even operator error. The equipment that you want covered is usually listed on your policy, which will normally cover these related costs:
- Repairing or replacing the offending piece of equipment
- Labor costs associated with repairing and replacing equipment
- Associated loss of income
- Damage to surrounding property
- Spoiled goods and materials
- Loss of computer or data equipment
There are some restrictions, such as a 72 hour waiting period before the policy will kick in to help pay the cost of a leased vehicle.
Part of your Business Owners Policy
Typically, equipment breakdown or business equipment insurance is part of your Business Owners Policy (BOP). Nearly all businesses need business equipment insurance, from convenience stores to office complexes. However, there are few businesses that can be extremely hampered by equipment failure as much as construction companies. Construction projects are often linear, meaning you simply can’t work on something else while you are waiting. For this reason, equipment breakdown is an important part of an insurance policy for construction companies.
It’s vital to have a good policy in place when a piece of equipment does breakdown. If you would like to review your policy to ensure you have enough coverage for the types of projects and equipment you are running, be sure to contact us at H&K Insurance, in Watertown, MA. We offer specialty plans for construction companies in addition to a full spectrum of insurance plans. A member of our expert team will walk you through the process to ensure you and your business are sufficiently protected.
John Herlihy has served H & K Insurance Agency Inc. clients since 1982. John, the Vice President, is engaged in all phases of the agency’s operations and management. He is dedicated to providing excellent service. John’s professional designation of CIC (Certified Insurance Counselor) signifies to clients a competent professional and their assurance of quality assistance with their insurance needs.
