Breaking Down Equipment Breakdown for Farm Insurance Policies
Updated: October 22, 2019
Operating a modern, commercial agricultural business means investing in the necessary equipment to operate. From 10 acres to 1,000 acres, there’s an exhaustive list of equipment and technology to farm. Minimize downtime and save yourself the hassle of hiring to repair mechanical, electrical, and pressure systems breakdowns by choosing to add farm equipment breakdown coverage to your insurance policy.
Just what exactly is an equipment breakdown? It is defined as physical loss or damage originating within mechanical, electrical, electronic, or boilers and other vessels normally subject to vacuum or internal pressure.
Mechanical Equipment Breakdown
When equipment has moving parts that fail to operate, it is considered a mechanical breakdown.
Example
The exhaust fan in the poultry house mechanically seized due to lack of lubrication. An alarm system alerted the operator to the problem and a temporary fan was brought in before losing fowl. Total property damage covered was $3,500 plus an extra expense of $800.
Electrical or Electronic Equipment Breakdown
Wiring and fibre optics running through farm equipment can break down due to a power surge or a single phasing event (that’s when the lights flicker or only some lights go out). Another cause for electrical breakdown is an arcing occurrence between wires.
Example
A severe voltage spike damaged the windings in a 50hp feed water pump motor. The motor could not be repaired due to the extensive electrical damage and was replaced. Total property damage covered was $5,575.
Pressure System Equipment Breakdown
Any equipment under pressure that fails to operate due to a rupture, bursting, bulging, implosion, or steam explosion.
Example
The 300hp irrigation pump seized due to low water conditions. Repair parts were obtained and shipped overnight. The costs to the property were $15,025 and an expediting expense of $1,200 was included.
Types of Farm Equipment
Additional examples of property covered include:
- Air Conditioning Units
- Automatic waterers
- Boiler and Pressure Vessels
- Circuit breaker panels
- Compressors
- Computer Controlled Equipment
- Computerized feeding systems
- Computers
- Conveyors
- Electrical Systems
- Generators
- GPS Equipment
- Heating and cooling systems
- Heating Units
- Irrigation Systems
- Milking parlors and collection equipment
- Motors
- Pumps
- Refrigeration compressors
- Refrigeration Units
- Transformers
- Well/Water pumps
Limitations
Many insurance policies limit or exclude equipment breakdown in the main policy, so adding coverage to protect your investment in farm equipment is essential
Ultimately, farm equipment is meant to be used. With use comes natural wear and tear to the equipment and all devices have a life expectancy. This wear and tear is not protected with farm equipment breakdown coverage.
Talk with your insurance broker to see if farm equipment breakdown is the right coverage for you.
