Equipment Breakdown Insurance: Too Important to Ignore!

ADJUSTING TODAY

...stated the following with regard to expediting expense coverage:

It was developed at a time when boiler and machinery policies were written as separate policies on a specific object basis. If such a policy covered production equipment, for example, and a piece of equipment of that type were damaged in a fire or other peril insured against, the policy’s expediting expense provision would obligate the insurance policy to pay “additional costs to fly in the new permanent object or the extra cost of temporary repair of the damaged object.”

When conventional boiler and machinery policies were replaced by comprehensive all risk policies, many insurers incorporated “expediting expense” language in the new policies. As a result, expediting expense coverage was provided for all damaged objects within the ambit of the expanded policies, including objects—electronic data processing equipment, e.g., or communications equipment— that might not have been covered under the older policies. But the adoption of the comprehensive all risk forms produced no change “in the nature and extent of expediting expense coverage….”

According to the court, the logic of this unrefuted testimony of the insurer’s chief underwriter was that expediting expense coverage was not somehow transformed into extra expense coverage. The record reflected in this case that the named insured utility specifically requested expediting expense coverage but not extra expense coverage, which was not purchased.

Donald S. Malecki, CPCU

Mr. Malecki is a principal of Malecki Deimling Nielander & Associates, LLC, an insurance and risk management firm. He began his career over 50 years ago and has held the titles of insurance underwriter, broker, insurance company claims consultant, archivist, historian and teacher.

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