When equipment breaks down, it can be useful to know what is covered by the warranty, maintenance contracts or insurance to get back up and running quickly.
Considerations for Equipment Breakdown
You may find the following quick reference guide useful. However, before using the guide, please note the following:
1. Always check the small print
Refer to the terms and conditions, inclusions, exclusions and sums insured limits set out in the manufacturer’s warranty, maintenance contracts and insurance product disclosure documents provided to you at the time of purchase. They are a helpful guide as to what is and is not covered or included as part of your warranty, insurance contract or service agreement.
2. Keep your insurance adviser informed
Inform your insurance adviser of equipment purchases to ensure you have the cover you need. It may not be covered by your existing policy. Your insurance adviser can help ensure your cover remains adequate for your specific business needs.
A Quick Reference Guide for Machinery Breakdown
| Breakdown Cause | Typical Manufacturer’s Warranty | Typical Full Maintenance Contract | Equipment Breakdown Insurance |
|---|---|---|---|
| Faulty materials or workmanship | Yes | No | Yes |
| Accidental Breakdown | No | Sometimes | Yes (check exclusions) |
| Operator error of equipment misuse | No | No | Yes |
| External Power Surge | No | No | Yes (check exclusions / inclusions) |
| Typical Reimbursement Inclusions | Typical Manufacturer’s Warranty | Typical Full Maintenance Contract | Equipment Breakdown Insurance (subject to specified policy limits and inclusions/exclusions) |
|---|---|---|---|
| Direct Damage to Surrounding property | No | No | Yes (check cover) |
| Lost refrigerant | No | No | Yes (check cover) |
| Refrigerant lost through leakage | No | No | No |
| Labour Cost to repair/replace parts | No | Sometimes | Yes (check cover) |
| Business interruption losses | No | No | Yes (optional, check inclusions) |
| Extra expense of rental equipment, rental facilities and/or temporary repair | No | No | Yes (optional, check inclusions) |
| Spoilage of perishable products | No | No (can be optional inclusion) | Yes (optional, check inclusions) |
| Ammonia contamination cleanup | No | No | Yes (optional, check inclusions) |
| Full repair or replacement cost of parts and property | Sometimes | No | Yes (check cover limits) |
| Expediting expenses of overtime, labour, fast freight etc. | No | No | Yes (check cover) |
| Oil, clean, adjust, change filters – maintenance | No | Yes | No |
| Repair and replace worn parts | No | Yes | No |
Source: The information provided in the table is based on Factsheets by Sura Underwriting & Vero Insurance
Advice on machinery breakdown cover
If you need to speak to an insurance adviser about your risks and insurance program, contact our friendly team today.
You can also take advantage of our no-obligation risk and insurance review for complete peace of mind.
General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.
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