Why Buy Boiler and Machinery Insurance?
Property Coverage – Most property insurance policies do not cover your losses resulting from breakdown of expensive machinery or from explosion of high pressure (exceeding 15 p.s.i.) steam boilers, pipes, turbines and engines. Damage to building, personal property and the equipment itself should all be covered under a boiler policy. The boiler policy also protects you against other losses not covered by basic property insurance, such as electrical surges or arcs.
Loss of Use – Breakdown of heating, cooling, or processing equipment may bring operations to a halt. Will you be able to handle the loss of income when production is shut down or when occupancy of your building is impossible due to lack of heat or cooling? This coverage can also be provided under a boiler and machinery policy.
Consequential Loss – Will you lose goods through spoilage if heating or cooling equipment breaks down? This is another area for boiler and machinery coverage.
“Boiler and machinery coverage can be extremely broad and can include equipment breakdown.”
Who Needs Boiler and Machinery Insurance?
- Churches, apartments, schools, hospitals, municipalities, florists, dry cleaners, manufacturers and auto repair shops, to name a few. Almost all older downtown buildings are heated by some type of boiler. A boiler is a fired vessel in which water is heated or converted into steam by combustion of fuel in its furnace. In addition to boilers and other fired vessels, you may have other expensive equipment that should be protected by a Boiler and Machinery Policy.
- Unfired vessels: Air, steam or water tanks; refrigeration systems; chests or rolls on steam pressers, steam cooking kettles and rendering tanks; chemical process tanks; steam forms; digesters.
- Machines: Engines; compressors; pumps; wheels; gears; centrifugal dryers; production machines.
- Electrical apparatus: Generators; motors; transformers; switchboards and controls.
- Refrigerating units and small (15 HP limit) compressing units.
- Deep-well pump units.
- Air conditioning units of all sizes.
You can insure all of the above equipment by selecting comprehensive coverage. Deductibles are available to help you control premium costs by eliminating claims for small items and maintenance problems.
How Are These Exposures Covered?
Boiler and Machinery – The Limited form of Boiler and Machinery coverage is designed to cover the catastrophic loss such as explosion. The Broad form covers not only explosion but also sudden and accidental breakdown. Most boiler coverage is written on a repair or replacement basis; like the replacement cost provision of other types of property insurance, this allows you to replace damaged property with similar new property.
Business Interruption – This form covers loss of use. Loss of profit and continuing expenses due to a total or partial decrease in production are covered. It may be written with a specific limit or on an actual loss sustained basis. Extra expense coverage may also be written to cover the increased cost to get you back in business quickly.
Consequential Damage Coverage – This form provides replacement cost coverage for goods lost due to spoilage should heating or cooling equipment break down.
We can guarantee that your rates will not go up during the policy term if there is no change in the risk. Boiler and Machinery policies offered through W.E. Davis Insurance and underwritten by Cincinnati Insurance Company are issued for three years with annual payments. Quarterly and semi-annual payments are also available.
An Added Value For You – Inspection Service
Many boiler and machinery items must be inspected regularly by licensed inspectors. This may include not only high pressure steam boilers and other pressure vessels but also low pressure steam boilers, most hot water heating boilers and possibly unfired pressure vessels. For clients of Cincinnati Insurance Company, your Cincinnati Insurance field engineer provides this inspection service.
The inspection makes possible another very important function: loss prevention. When items are inspected regularly, many times problems can be avoided. This, of course, is far preferable even to an insured loss. Although safety of a unit cannot be guaranteed, there is a certain “peace of mind” for you in knowing your boiler is seen regularly by an engineer.
This is not a policy. For a complete statement of the coverages and exclusions, please see the policy contract.