Ten reasons why you should consider machinery insurance
When it comes to plant and machinery insurance, and machinery business interruption insurance, there are many misconceptions. As a result, businesses are often underinsured and unable to cover the costs of unexpected breakdowns, damage, or loss.
There are lots of reactions to this type of insurance such as: “But aren't these policies designed for large manufacturers with processing equipment?”, and “Isn’t this cover included as part of my warranty?” We have explored ten reasons why it's essential to have machinery insurance and machinery business interruption coverage for your business.
- Your property insurance typically covers fire, flood, and theft. You may need additional coverage for mechanical failure, electrical short-circuiting, motor burnout, or damage from accidental events, explosions, or collapse.
- Cover can be bespoke to the needs of your business - from a small Motor Trader to a large Commercial Manufacturing Risk.
- A machinery business interruption policy can be extended to cover damage caused by events beyond your control, such as third-party damage to water pipes or flooding of a local substation.
- Unlike a property policy, a machinery policy can cover operator errors, for example, if a machine incurs damage by not being set up incorrectly.
- You may be eligible to receive funds before you resume trading. In the event of Business Interruption, "payments on account" can be obtained before the end of the indemnity period.
- Interruption cover may encompass failures of the building management system, upon which many modern office buildings rely to regulate the working environment.
- Cover can help you meet leasing company requirements, which typically state it’s your responsibility to repair or replace machinery that is damaged or destroyed while in your care.
- Business Interruption cover can safeguard your financial stability, an important protection, given that many firms may start to have serious liquidity problems within a few weeks of essential machinery becoming unavailable.
- Depending on the cover provided, additional costs to avoid or minimise financial loss, such as overtime or temporary workers’ wages, can be paid.
- Regular inspection and maintenance programs are not a guarantee; damage can still occur, leading to catastrophic consequences.
Many standard property or business interruption policies do not cover unexpected costs incurred by breakdown, loss, or damage to plant and machinery. As a result, you may be unable to meet the costs of the repairs required to get back up and running. To learn more about these insurances and whether your business needs to have them in place, please get in touch. We have many years of experience advising businesses on their insurance requirements and can ensure you have the necessary cover in place for your needs.
Staying in tune with the needs of your business is what we do best, so to ensure your plant and machinery are properly insured, please call on 01992 703 300 or email insurance@nlig.co.uk