Is Your Manufacturing Plant Covered for Equipment Breakdown or Utility Failures?

When working in the manufacturing industry, even a brief interruption can lead to significant financial losses. Equipment breakdowns and utility failures due to mechanical issues, power outages and other unexpected situations can halt production, delay deliveries or otherwise affect your bottom line. Understanding and addressing related coverage needs is critical.

What Types of Insurance Can Address These Issues?

Several types of insurance policies can help protect your manufacturing plant from the financial fallout of equipment and utility failures:

• Equipment breakdown insurance—Also known as boiler and machinery insurance, this type of policy can cover the repair or replacement costs of essential machinery due to mechanical failure, electrical short circuits or operator error.

• Business interruption insurance—This type of policy can compensate for lost income and operating expenses if your plant is forced to shut down temporarily due to a covered event, such as a utility failure or equipment breakdown.

• Utility services interruption coverage—Often available as an addition to commercial property or business interruption insurance, this can cover losses resulting from disruptions in water, electricity, gas or telecommunications services.

• Additional property coverage riders—Some business property insurance policies can be customized with endorsements to include coverage for specific equipment or utility-related risks. A qualified insurance agent can help you explore your options.

What Steps Should I Take to Ensure I Have Sufficient Coverage?

When thinking about your coverage needs and confirming that you have appropriate insurance, consider the following steps:

1. Conduct a risk assessment. Identify critical equipment and utilities essential to your operations. Understand the potential impact of their failure.
2. Review current policies. Work with your insurance broker to examine current coverage and identify any gaps, especially in areas like utility service interruptions or outdated equipment.
3. Consider customization options. Tailor your insurance policies with endorsements or riders that reflect the unique risks of your facility.
4. Prioritize maintenance. Insurers may offer more advantageous terms or lower premiums if you demonstrate a commitment to maintaining equipment and a risk-averse environment.
5. Document everything. Keep detailed records of equipment maintenance, utility service agreements, and past incidents to support future claims.

We’re Here to Help

If you own or operate a manufacturing plant in Palatine, IL, the team at Pitcher Insurance Agency, Inc. can help you assess your coverage needs and secure appropriate coverage for equipment breakdowns and utility issues. Contact us today to explore your options and compare personalized quotes.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.