Fireman’s Fund Insurance Company has introduced Commercial Equipment Breakdown coverage, which replaces the company’s previous boiler and machinery form and protects a broad range of property risks normally excluded from property insurance packages.
“Fireman’s Fund is actively marketing this updated coverage because only about 500,000 out of 10 million American businesses protect against such risk,” said Joe Dillon, senior vice president of underwriting for Fireman’s Fund Commercial Business. “Industry underwriters often decline to quote this risk because they view it as a difficult-to-understand specialty line. So Fireman’s Fund has undertaken a comprehensive training program for our underwriters in the elements of equipment breakdown risk. We’ve also begun a national campaign to educate agents and encourage them to discuss this coverage with their clients.
“Our coverage is tailored to automation and modern technology,” continued Dillon. “Typical loss examples at a hotel illustrate the coverage need. Even though many modern hotels do not have boilers, all have heating and air-conditioning systems that can shut down, inconveniencing guests. Also, if a power surge or faulty workmanship results in electrical arcing, a computer system could be knocked out, which could bring down the guest booking system, resulting in equipment downtime and loss of business.”
Fireman’s Fund brochures highlight that the coverage can now be easily added to the company’s long-standing Property Gard policy for a more comprehensive set of coverages. Offering equipment breakdown insurance also tends to protect agents from Errors and Omissions exposure because it brings more attention to an often-overlooked coverage. The company is also making equipment breakdown coverage part of the standard product offering for Small Business customers.
“Even tenants in leased buildings can be at risk, especially those who are referred to in their contract as ‘net lease holders,’ which makes them responsible for equipment service on the leased premises,” added Dillon. “And such equipment can be anything from water pumps and underground cables to elevators and rooftop machinery. Also vulnerable are PBX systems and complex building climate controls.”
By purchasing this coverage through Fireman’s Fund, businesses can have any boiler inspections required by states or municipalities done at no extra charge. Fireman’s Fund has partnered with Hartford Steam Boiler Inspection and Insurance Company and Travelers BoilerRe, which provide the expertise for these inspections.
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