Last Revised:
August 05, 2008

Equipment Breakdown

Equipment Breakdown fills the coverage gap.

All Risk Property forms exclude loss or damage caused by:

Mechanical Breakdown
Electrical Breakdown
Centrifugal Force
Pressure Equipment where loss is by Explosion (other than combustion), Rupture, Bursting or Cracking, burning out, bulging or collapse .

All Risk Property forms exclude the following property:

Pressure vessels & piping that operate over the 15psi (except portable gas cylinders)
Boilers, pressure vessels or piping containing steam or water under steam pressure
Electrical devices, appliances or wiring due to arcing.

Equipment Breakdown insurance essentially covers one peril – a “Breakdown to Insured Equipment”.

Definition of Breakdown – means a sudden and accidental failure of insured equipment resulting in physical damage to the equipment which requires that equipment or part of that equipment to be repaired or replaced.

Breakdown does not mean:

Depletion, deterioration, corrosion or erosion of material
Wear & tear

The above two items are not covered because:

This damage is not sudden and accidental.
It is predictive and preventive maintenance can prevent it.
Life cycle of equipment sometimes determines when this type of loss will occur
Vibration or misalignment
Functioning of any safety or protective device
Failure of any structure or foundation supporting the insured equipment.

HOWEVER, if a “Breakdown” results, coverage will be afforded for the resultant damage.

COMMON CAUSES OF EQUIPMENT BREAKDOWN:

Operator Error
Improper startup
Lubrication failure
Failure of safety devices
Foreign material
Supply line surges

Most warranties & Maintenance contracts don’t cover the above causes.

The MMFI Equipment Breakdown wording will provide the necessary coverage for the accidents and breakdowns that are not covered by property insurance policies, effectively eliminating any gaps. (i.e. mechanical breakdown, electrical arcing, rupture or cracking.) This coverage is automatically included on all farm outbuildings and equipment and all commercial buildings, equipment and stock. The equipment breakdown limits follow the values insured on the policies and you don’t have to find another source for this coverage.

Depending on the size of the risk the policy may be subject to a $20 or $40 minimum premium. This is a substantial saving over having to purchase the coverage separately.

Contact MMFI Underwriting Department for more information.

Farm - Equipment Breakdown Rider (F301)

Commercial - Equipment Breakdown Rider (C301)