I NEED HELP TO UNDERSTAND WHAT IS A BIOLER INSURANCE
The Boiler and Machinery policy started out as a way to provide coverage for a common exclusion under any commercial property policy, namely, damage to or caused by: ...any pressure vessel having normal internal working pressure greater than 103 kilopascals (15 pounds per square inch) above atmospheric pressure; or ...any boiler, including its connected piping and equipment, which contains steam or water under steam pressure (except tanks having an internal diameter of 610 millimetres (24 inches) or less used for the storage of hot water for domestic use); (welcome to the wonderful world of insurance legalese). At the beginning of the twentieth century boilers were in common use everywhere from manufacturing to heating, and breakdown or rupture was a real threat. An exploding pressure vessel could level a building! Therefore this policy was created first by specialty insurers who would issue these policies as stand alone policies, however many standard insurers now offer this coverage as an add-on to their commercial policies. Therefore the specialty insurers had to innovate their product in order to remain attractive. Not only does the modern Boiler and Machinery policy cover damage caused to and by pressure vessels, they also cover: damage or breakdown of electrical equipment caused by surges, short circuits or arcing; breakdown of air conditioning or refrigeration equipment including losses resulting from spoilage or loss of use due to the breakdown of said equipment; damage to computer or communication equipment caused by surges or fluctuations including the loss of business income caused by the loss of said equipment; mechanical breakdown of most types of machinery such as water pumps, ventilation fans, escalators and elevators, motors, engines, etc including the loss to business income because of the breakdown of said equipment. Note that production machinery usually has limited coverage or a higher deductible.
Boiler insurance is better known as boiler and machinery (BM) or Mechanical, Electrical, Pressurized Equipment (MEPE). It is a coverage that is either sold as a stand alone policy or as an option on a standard property policy. The purpose of the policy is to add coverage for those big ticket items that a business owns, such as AC units, Elevators, and, of course, boilers, aganist unexpected and sudden loss. For example, if an electrical surge burns a compressor out on a large walk in freezer, most standard property policies have very limited or no coverage. The BM policy covers that and so much more that a detailed discussion is impossible here. If you need more information, pull a policy and read through it. It is vital for agents to understand this coverage if they sell commercial accounts.
