Typically excluded in Standard Forms of Insurance, Boiler and Machinery Insurance, sometimes referred to as Equipment Breakdown Insurance, is a Specialty Insurance or Endorsement that covers the cost of damages that occur from the sudden and accidental breakdown of specified equipment; such as:
- Mechanical breakdown;
- Electrical arcing;
- Artificially generated electrical currents;
- Centrifugal force;
- Boiler overheating, cracking, bulging, sagging;
- Bulging, cracking or collapse of pressure vessels, such as water heaters, compressed air tanks, steam cookers and kettles, expansion tanks and condensate return tanks.
Depending on the policy purchased, Boiler and Machinery Insurance may cover the expenses associated with:
- Direct Property Loss – the cost to repair or replace damaged equipment;
- Lost business income and costs for temporary replacement equipment;
- Expenses incurred to mitigate the loss and/or speedup restoration of operations;
- The financial loss associated with unusable inventory due to a covered breakdown; and/or
- Business recovery expenses.