FARMERS ALLIANCE COMPANIES
Equipment Breakdown Coverage
for Business Owner Policies
Every day businesses from large
manufacturing operations to
small retail stores rely on their
mechanical and electrical
equipment to maintain their
operations. No business can aord
losses to this equipment which
may originate within mechanical,
electrical or pressure equipment.
Although more common than a
re, these equipment failures are
not covered by many standard
businessowners and commercial
property policies, thus creating
costly coverage gaps. Many
property policies exclude losses
arising from mechanical, electrical
and pressure systems breakdown.
These are the types of occurrences
that can cause major losses and
possibly force a company out of
business. Equipment Breakdown
Coverage addresses these gaps.
Equipment Breakdown Coverage
responds to the cost to repair or
replace mechanical, electrical or
pressure systems equipment that
suers a breakdown.
Indirect losses arising from a
covered equipment breakdown can
result in additional losses, such
as business interruption, extra
expense and spoilage.
Warranties and maintenance
contracts may have gaps as
well. Typically, they do not cover
accidents to equipment caused
by operator error, business
interruption, extra expenses, or
spoilage losses which can result
from an equipment failure.
Equipment Breakdown Coverage
provides the nancial protection
you need to run your business
and continue to meet customer
demands without worry. Adding
this coverage enhancement to the
commercial insurance program
protects from these exposures.
Farmers Alliance has partnered
with the experts at Mutual Boiler Re
to oer this specialized coverage
enhancement to all Business
Owners Policy (BOP) customers.
Contact your Farmers Alliance
agent to nd out more.
Electrical Equipment
Fans/Blowers
Tankless Water Heaters
Debit Card/Credit Card Systems
Electrical Service Panels
Televisions
Underground Wiring
Money/Bill Changers
Vending Machines
Telecommunications Equipment
Auto-Dosing Systems (cleaning liquids)
Security Systems
Computers
ATM Machines
Water Softening Systems
Water Drain Valves
Mechanical Equipment
Washers
Dryers
Flatwork Ironers/Finishers
Air Conditioning Units
Pumps
Motors
Boilers and Pressure Vessels
Hydronic Boilers
Copper Finned Water Heaters
Heat Exchangers (Hot Water)
Vertical Firetube Boilers
Time Element
Business Interruption
Extra Expense
Service Interruption
Ammonia Contamination
Exposures
See the other side of this informational yer for examples
of typical Equipment Breakdown losses.
Form No. MK-501, Ed. 12-2019
©2011 Factory Mutual Insurance Company. All rights reserved. This info sheet is made available for
informational purposes only in support of the reinsurance relationship between Mutual Boiler Re and Farmers
Alliance. This information does not change or supplement policy or treaty terms or conditions. The liability of
Mutual Boiler Re is limited to that contained in the reinsurance treaty agreement.
This summary is for marketing purposes only. Refer to the policy for coverages provided and pricing. If there
is any conict between the policy and this document, THE PROVISIONS OF THE POLICY SHALL PREVAIL.
A broken piston rod in an air conditioning
compressor caused property damage and
interruption of business.
Property Damage: $1,200
Business Interruption: $6,450
Insulation breakdown occurred in
the motor of a hermetically sealed
refrigeration compressor causing frozen
food to spoil.
Property Damage: $5,852
Spoilage/Consequential: $4,950
The motor driving the refrigeration
compressor for the three-door cooler
short circuited, requiring replacement of
the hermetically sealed motor/compressor
unit.
Property Damage: $1,800
Spoilage/Consequential: $1,400
A broken shaft in a centrifugal air
conditioning compressor resulted in
property damage and loss of rental
income.
Property Damage: $34,800
Business Interruption: One Day
Extra Expense: $12,000
Rupture of an air tank supplying control
air to the heating, ventilating and air
conditioning system caused a systems
shutdown for one day. Computer
operations were also impacted.
Property Damage: $1,150
Business Interruption: $17,480
Insulation breakdown of an underground
electrical feeder cable occurred.
Replacement required excavation of the
parking lot, which signicantly increased
repair costs. Temporary service was
run above ground to mitigate a potential
business interruption loss.
Property Damage: $33,763
A power surge caused damage to
each transformer on ve washers. New
transformers were ordered from the
original equipment manufacturer (OEM)
and were replaced in two days.
Property Damage: $2,000
Business Interruption: $400
Mineral scale built up on boiler tubes
causing the heat exchanger inside the
boiler to overheat and crack. The boiler
had to be replaced because of extensive
heat damage to the shell and other
components.
Property Damage: $3,600
A screw left in a pocket of a pair of pants
fell and became lodged in a dryer hole,
snagging wires inside the dryer and
causing electrical arcing. The arcing
caused subsequent damage to another
dryer. Both dryers had to be replaced.
Property Damage: $12,700
Mechanical breakdown of a piston rod in
the main air compressor caused property
damage and business interruption until a
rental unit could be secured.
Property Damage: $1,950
Business Interruption: Two days
Overheating of a boiler caused loss of
use and shutdown of the store.
Property Damage: $3,500
Business Interruption: One day
A motor burnout in a hermetically sealed
refrigeration unit resulted in food spoilage.
Property Damage: $2,560
Spoilage/Consequential: $1,450
Equipment Breakdown Coverage
Typical Losses
Typ
1122 N Main, PO Box 1401, McPherson, KS 67460
620.241.2200 • www.fami.com
For additional information, contact
your Farmers Alliance Agent
These examples are from actual
customers of Mutual Boiler Re and
their partner companies. Remember,
each claim must be evaluated based
on your specific policy.
