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Machinery breakdown insurance is an additional cover that protects motors and mechanical equipment that is vital to your business operation. In summary, an equipment breakdown policy is designed to cover things like air conditioning units, cold rooms, commercial fridges, chilled display cabinets, and any other machinery you use as part of your business operation.
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What you need to know about
Machinery breakdown insurance can either be purchased as an individual policy or packaged up with an additional business package insurance policy A machinery breakdown policy is usually recommended for businesses that operate in the following industries:
There are a number of other industries that should consider having an equipment breakdown policy in place however, the above businesses usually have a greater loss occur if something was to happen.
As a business owner, you tend to know what equipment and machinery is a vital part of your business and if it than a machinery breakdown insurance policy should be considered to reduce your chance of not only a large loss occuring but also the interruption costs to your loss of trade.
Machinery breakdown policies typically have two main sections, one being cover for the breakdown component and the second being the consequential loss due to the damage of the machine. It is important to note that on a business package policy if you don’t have business interruption included then generally speaking no consequential loss would be included.
Why should you use Priority Insurance Brokers to arrange your Machinery Breakdown Insurance?
We have all the answers to your questions about
An optional extra on the policy is to add deterioration of stock which would typically also cover any stock that's contained and spoiled should the fridge break down.
If you have a cold room or a commercial-size fridge or freezer then we always recommend our clients take out this cover as the value of perishable goods can be quite large.
Your standard business insurance cover for contents and stock may not cover perishable items such as food and other chilled items.
Depending on the amount being covered will typically determine whether you should have a standalone policy or not.
If you heavily rely on your machinery and you have a high value of machinery it usually works out more cost-effective to have a separate policy.
If your business has some additional machinery for storage such as display cabinets, commercial fridges, and cold rooms then having this on your business insurance is a better idea.
Machinery breakdown cover is a scalable premium based off what is being covered and the value to replace those items. For larger valued items you will typically pay a higher premium.
This depends on your risk appetite, some businesses don't take out a machinery breakdown policy and some wouldn't operate their business without it. If a loss of the stock inside would impact your business financially or replacing a part on an expensive machine would be a significant set back then you should consider adding this to your insurance program immediately. Breakdowns aren't something is typically predictable so you never know when a high valued loss would occur.
We understand that running a business takes a lot of work and as a business owner you’re expected to be across all of the different aspects of your business operation. We have tried to make our process as simple as possible and all of our Brokers work with each business owners to have a strong understanding of your business and whats required to be in place to ensure that there are no nasty surprises. We pride ourselves on not hiding behind the fine print.
A typical claim scenario for this type of policy is:
A business owner or employee has opened up the shop in the morning and noticed that the food has spoiled due to a cold room breaking down in the early hours of the night before. The stock inside is usually a couple hundred if not thousands of dollars along with the breakdown issue needing to be diagnosed.
Due to not having any stock to sell the business has to close until the cold room is fixed, operational again and the stock can be re-supplied by the wholesalers.
As the insured had the suitable additional covers in place the cold room was repaired and a replacement part expedited from the manufacturer, the loss of spoiled foods was reimbursed and the 3 days of reduced trade was also reimbursed.
There are a number of other policies that we typically recommend to business owners that require machinery breakdown insurance policies and this typically includes
As an Insurance Broker, we specialise in packaging up multiple policices which present the best priced options but having them managed together in easy to maintain policies.
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The first step is to speak with an Insurance Broker so that we can ask questions about your business and get familiar with how you operate. This allows us to tailor a suitable package to your needs.
Once we understand how your business runs, we will need to get a schedule of your machines which would typically include the make, model, serial number and the insured value that you need for each machine.
We will then contact a number of our insurers and request them to provide us with a quote. Once all of our quotes come back, we will review them and present you with the best option. We will outline our recommendation to you and seek your acceptance.
Once we have your instructions to proceed with the policy we will then organise payment of the policies. Policies can be paid annually or via our monthly premium funding options.
Most machinery breakdown insurance providers require you to go through an Insurance Broker. There may be some insurers that allow you to put a policy in place however, most of our quotes are obtained through Underwriting Agencies that only distribute their policies through a Broker.
No, you don’t. For full transparency of our remuneration, insurers pay us an agreed commission when you proceed with the policy. This is not in addition to what you pay and in most cases we are able to pass on a cost reduction to our clients by finding a more competitive policy or by reducing the impact of their quoted renewal premiums.
Contents and stock cover will typically only provide you cover for fire and peril related events. These will typically be accidental damage, malicious damage, fire and other weather events. If your stock or machinery has perished due to a breakdown this isn’t usually covered under your contents and stock cover.
Yes, this is also a good reason to consider having a policy in place. If you have imported the machinery from overseas then there is a good chance that parts may also need to be sent from overseas. Most policies will cover additional costs to have parts expedited via faster shipping methods.
During the quoting stage we typically need to declare the general items that are kept within fridges and cold rooms when we request deterioration of stock cover. Along with advising the type of items we also need to indicate an estimate value of the items contained.
We assist with the management of all insurance claims under all of our managed policies. We work with business owners to get the optimal results while also handling a lot of the admin work involved.
We ensure that your policies are providing you with the best level of cover. Don't pay for insurance that you don't need.
We work with you and our insurers to continue to provide you the with competitive premiums across our network.
Your dedicated account manager will work with you and tailor the advice to your business and what covers you should have in place.
Your account manager will continue to provide you with professional insurance advice as your business grows and expands.
We aim to provide you helpful information that can assist you in making insurance decisions. To view all of our blog posts, click the button below.
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