What does a boiler and machinery policy typically cover?

A boiler and machinery policy, often referred to as equipment breakdown insurance, generally provides coverage primarily focused on the breakdown of machinery and equipment. This includes the repair or replacement costs associated with the physical damage to the boiler, machinery, or mechanical systems when they fail.

Additionally, these policies often extend to cover consequential damages that result from equipment failure, such as lost income or additional expenses incurred while operations are interrupted. This type of coverage is essential for businesses that rely on machinery to operate, as it helps them mitigate financial losses stemming from unexpected breakdowns.

In contrast, property damage coverage does not encompass the specific needs related to machinery operation failures, merely addressing damage to physical property. Liability for bodily injury pertains to incidents where someone is harmed on the premises or by the business, which is also not the primary focus of a boiler and machinery policy. Lastly, worker's compensation insurance is a completely separate form of coverage designed to protect employees who are injured on the job, rather than the machinery or equipment itself. Thus, the comprehensive nature of a boiler and machinery policy, particularly its focus on equipment breakdown and the resulting consequential damages, makes it a crucial coverage for businesses that depend heavily on machinery.