Let’s look at a section of your commercial insurance that is probably not very clear to you. Have you ever noticed a coverage called Equipment Breakdown in your policy? Have you ever realized that this coverage’s limit is equivalent to the total amount of your property coverage as well as the amount payable for business interruption?
This protection aims to cover risks that are excluded from your property coverage. It can be divided into two types of risks: live appliances and pressure vessels.
The resulting damage must have been caused by an accident. Therefore, the damage cannot have resulted from corrosion, erosion, dewatering, deterioration, wear and tear, valve leakage, vibration, misalignment or cracking of any part of a gas turbine exposed to the products of combustion.
Several elements of your microbrewery are affected by this coverage. Let’s consider, for example, the compressors of cooling systems, the pumps, the electrical panels, the steam boiler, hot water or thermal fluid. Multiple types of losses can occur: direct damage to machinery, consequential damage caused by the explosion or overvoltage of said machine and interruption of revenue triggered by this loss.
Are you familiar with the Act respecting pressure vessels?
Today, I will focus on a piece of equipment that all microbreweries own: a boiler. I urge you to refer to the Act respecting pressure vessels (chapter A-20.01) because insurers apply the same standards. It includes a schedule at the end which specifies the frequency and the types of inspection for each vessel.
Even if your insurance policy covers the loss, it does not eliminate the fact that incidents can be prevented and avoided by ensuring proper inspection and maintenance. That also goes for the safety of your employees. I suggest that you develop a maintenance schedule for your equipment. If you need any help putting one together, I am at your service.
Common examples of loss
One of the most common losses involving boilers is the malfunction of the automatic shutdown system when the water level is low. If the boiler continues to produce heat without any water, the heating element will continue to burn and permanently damage your equipment. This situation can be avoided by checking the equipment’s safety systems on a regular basis.
When it comes to pressure equipment, the electrical panel is usually what takes a hit when voltage fluctuations occur. This can cause a power outage to the whole location. Voltage surges can also cause some cooling or heating systems to malfunction, which in turn results in greater losses. In case of uncertainty, talk to your broker to see whether a loss would be covered or not.
Do not hesitate to contact me for more information.