Equipment Breakdown - Yes, Please
Updated: Apr 14, 2020
Lightning damage to your equipment is readily covered under the standard Commercial Property Insurance form, as long as the strike doesn't occur at an off-premises utility station or onsite piece of equipment used to supply the utility service to the premises from a source away from the premises. This requires off-premises utility cover.
The situation of a contractor wrenching away on your electrical panel, or similar, and creating a surge that damages your equipment is not covered. This is artificially generated current, specifically excluded in the Commercial Property Insurance form. As is electrical arcing.
Also excluded in the ISO CP form is explosion of steam boilers, steam pipes, steam engines, or steam turbines... excepted under limited circumstances.
These types of losses require Equipment Breakdown cover. Whether it's a rooftop HVAC, boiler, phone system, production or lab equipment, or computers... the protection under a property form is incomplete and each insured should fill the gap with Equipment Breakdown.
Additionally, the Equipment Breakdown policy will respond to internal breakdowns of machinery and equipment, and can be setup to protect against income losses and other extensions.
Bottom line ~ Equipment Breakdown is a smart decision.