Stu Lee is Outdoor Advertising Program Manager at Bassler and Co Insurance.   Today he talks about the importance of business interruption insurance and equipment breakdown insurance for an out of home company.

 What is loss of business income insurance and why is it important to an about of home company?  

To put it simply….Business income insurance helps cover you and your business due to the loss of business income. … During this time, your business income insurance can help cover your lost income. Along with Business income coverage is usually Extra Expense coverage, which Extra expense insurance is a form of commercial insurance that pays for additional costs in excess of normal operating expenses that an organization incurs to continue operations while its property is being repaired or replaced after having been damaged by a covered cause of loss.  I have billboard operators that were very happy to have had Business Income coverage when one or more of their key money-making digital billboards were destroyed by a hail storm.

What is equipment breakdown insurance and why is it important to an out of home company.

Equipment breakdown (EB) insurance was initially called boiler and machinery insurance because it originated at a time when steam boilers were the main source of power for industrial machines. Boilers are still used for heating water but nowadays, most industrial machines are powered by electricity. For this reason, boiler and machinery insurance has been replaced by a broader coverage called equipment breakdown (EB) insurance.

With respect to Billboard and Sign companies, the key kinds of equipment failure covered under an Equipment Breakdown policy that are most likely to cause a loss are as follows:

• Electrical or mechanical equipment: A broad category that includes things like transformers, circuit breakers, furnaces, air conditioners, generators, compressors, refrigerators, ovens, production machinery, and elevators.
• Communication and computer equipment: Examples are telephone systems, security systems, fire alarm systems, computers, and printers.
• Failure of Utility-owned equipment: Means equipment that fits one of the above categories and is owned by a utility. The equipment must be located at the described premises and used solely to supply utility services to the insured’s premises. An example is a utility-owned transformer located on your premises and used by the utility to deliver electricity to your business.
• Electronic Circuitry Impairment: The Equipment Breakdown policies we sell to our outdoor advertising companies will cover the breakdown of electronic circuity, even if there is no evidence of a physical event or breakdown.

An example of some key exposures that Inland Marine and Property policies generally won’t cover are damages caused by covered internal forces, such as power surges, electrical shorts, mechanical breakdowns, or motor burnout.

Equipment breakdown policies also include coverage for the Loss of Business Income you incur from a covered cause of loss.

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