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The Sovereign advantage

To keep your operations running like a well-oiled machine, you need to invest in the protection of your equipment. Sovereign’s Equipment Breakdown risk solutions protect against mechanical, electrical and pressure vessel breakdown. This isn’t niche or specialized insurance; Equipment Breakdown is an important coverage for almost every business. But that doesn’t mean your protection should be generic. Our dedicated in-house team of experienced Equipment Breakdown Underwriters work with you and your broker to provide coverages designed to meet the unique needs of business operations like yours.

 

A better experience

We don’t believe in hoops and hierarchy when it comes to supporting our brokers and clients. Our underwriters have local authority, so you’re always talking to the decision maker.

No gaps in protection

Losses to your equipment aren’t always covered under your Property policy and there are exclusions that Equipment Breakdown is designed to fill. Whether your Equipment Breakdown coverage is attached to a Property policy or Standalone, we work with you and your broker to develop the right solution.

Value-added inspections

We can help you understand your Equipment Breakdown exposures and improve them based on industry best practices. Our in-house risk specialists have extensive experience and deep industry knowledge. Learn more about how we can add value to your business with Risk Assessments and Jurisdictional Inspections.

As industries, businesses and technologies grow and change, so does our appetite. We can also develop solutions for businesses and portfolios across many sectors.

Our risk appetite:

  • Agriculture
  • Construction
  • Government
  • Health services
  • Manufacturing
  • Realty
  • Retail
  • Transport & Warehousing
  • Utilities
  • Wholesale

Coverages designed to protect your business

Equipment Breakdown insurance can provide coverage for a broad range of equipment, from HVAC equipment to production machinery equipment to all types of electrical and technology equipment.  While you may think losses related to equipment breakdown are covered under your Property policy, typically Property policies contain exclusions that Equipment Breakdown insurance is designed to fill.  Some of the key Equipment Breakdown coverages we offer include:

Ammonia

Ammonia

Coverage snapshot

Ammonia is commonly used as a refrigerant gas and in the manufacturing of plastics, textiles, pesticides, dyes and other chemicals. It’s also corrosive and can cause loss or damage if it comes into contact with equipment. Ammonia coverage helps to respond to loss of insured property as a result of a breakdown to insured equipment that has come into contact with ammonia.  

Imagine a scenario where...

Failure of the ammonia compressor in a refrigeration system causes ammonia to contaminate food products. The food must be discarded leading to a significant loss of product. The ammonia extension is intended to cover this exposure.

 

Business Interruption

Business Interruption

Coverage snapshot

Business Interruption insurance is an optional coverage under an Equipment Breakdown policy that provides compensation for lost income if your business is closed due to an insured equipment breakdown loss. 

When it comes to protecting your business profits, there are a few options to choose from:

  • The Gross Earnings option provides coverage only until your insured property is replaced or repaired. As soon as your business resumes, the coverage stops paying, even if you have not regained your previous earning level

  • The Profits Form option continues to provide coverage until your business returns to its normal, pre-interruption level, up to your policy limits. This kind of coverage usually costs a bit more but is usually well worth the price for many businesses.

  • The Extra Expense option helps pay for the additional costs incurred while recovering from a disruption, for example, renting an emergency generator to provide temporary power to the facility for an extended period of time. The Extra Expense coverage on your policy is designed to cover costs such as these (and others, including overtime costs) to ensure your business can continue.

 

Imagine a scenario where...

It takes several days to repair or replace your equipment and you’re left worrying about how you’ll fulfill product orders and meet customer expectations. You face out-of-pocket costs to not only repair or replace the physical equipment but also the additional costs to keep your business up and running.

 

Margins Clause Special Extensions

Margins Clause Special Extensions

Coverage snapshot

A Margin Clause is an optional coverage extension and states the maximum amount an insured can collect for a loss at a particular location. It is a specified percentage of the values reported for that location on the Insured's statement of values. The maximum is normally stated as a percentage that is greater than 100 percent (such as 110 or 125 percent) to ensure you have a coverage buffer for an insured loss. 

Imagine a scenario where...

A Wholesale company has 30 locations across Canada. Over the course of the year, new equipment was added at one specific location to support their business. Subsequently, there was a $125,000 equipment breakdown loss but their policy limits stated they were only covered for $100,000. However, with a margin clause at 25% they were able to insure up to $125,000 or 25% over the declared amount at that location.

 

Production Machinery

Production Machinery

Coverage snapshot

Production machinery is used to produce all kinds of daily products and is found in virtually all manufacturing operations, including textile production, machine shops, and the food industry. These machines – such as hydraulic presses, extruders, paper machines, lathes, mills, and many more – process, form, cut, shape, grind or convey product. If your business experiences a direct physical loss of, or damage to, these important pieces of equipment as a result of a breakdown, Production Machinery coverage can help to reimburse these expenses. 
        

Imagine a scenario where...

A mechanical failure in your Computer Numerical Control (CNC) machine causes physical damage to the equipment, and ultimately seizes your automated production line. Production Machinery is intended to cover the loss arising from this type of exposure.

 

Spoilage

Spoilage

Coverage snapshot

If your equipment breaks down, you risk spoilage of your perishable stock. Spoilage coverage is intended to reimburse businesses when equipment failures ruin perishable items. Perishable stock typically includes items that:

  • Must be maintained under controlled conditions for preservation (i.e. temperature or humidity)

  • Are susceptible to loss or damage if those conditions change

Imagine a scenario where...

A power surge beyond your control damages your refrigerator and freezer units, exposing perishable stock to unsafe temperatures and humidity levels. This results in a total loss of your goods. The Spoilage extension is intended to provide coverage for this exposure.

 

Advice and tools

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