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How Mechanical and Electrical Breakdown Insurance Can Safeguard Your CNY Business

March 15th, 2024 | 4 min read

By Daniel J. Middleton

CNY shop closed to due technical issues

While running your CNY business, have you ever feared the dreaded clunk of a failing machine? You’re not alone. While your business insurance policy can’t prevent breakdowns, it can offer a helping hand with mechanical and electrical breakdown (MEB) coverage.

Owning a business in Central New York comes with unique challenges. From sweltering summers to unpredictable winters, your equipment faces a constant battle. Unexpected breakdowns can mean lost revenue, unhappy customers, and major headaches. 

At Horan, we’ve helped countless businesses navigate these challenges and emerge stronger. We’ve seen how MEB coverage can make a difference for our clients, whether it’s repairing a damaged HVAC system, replacing a faulty generator, or restoring a malfunctioning computer network.

This article delves into mechanical and electrical breakdown (MEB) insurance, providing clear insights to help you understand and utilize this valuable coverage. Consider this your resource for navigating the complexities of protecting your business from unforeseen equipment failures.

What is Mechanical and Electrical Breakdown Insurance?

Imagine your operation humming along, then suddenly, a vital piece of equipment throws a wrench in the works. Unexpected breakdowns can be stressful and costly, but there’s a shield to protect your business from such surprises? Enter mechanical and electrical breakdown (MEB) coverage.

Think of it as a safety net for your essential equipment, not a substitute for regular maintenance. While MEB swoops in to save the day for sudden breakdowns, it doesn’t cover the gradual wear and tear that comes with daily use. More on that later.

So, regular maintenance remains crucial for keeping your equipment running smoothly and maximizing your MEB coverage for those unforeseen emergencies.

How Does Mechanical and Electrical Breakdown Insurance Work?

What MEB insurance covers for your CNY businessMechanical and electrical breakdown insurance covers a wide range of equipment and systems that you use for your business, such as:

  • Air conditioning, heating, and plumbing systems
  • Computer and communication systems
  • Refrigeration and freezer systems
  • Security and alarm systems
  • Elevator and escalator systems
  • And more

If any of these equipment or systems break down suddenly and for no apparent reason, you can make a claim on your insurance policy for mechanical and electrical breakdown. The cost of fixing or replacing them will be covered up to a certain limit, depending on your policy. 

Usually, the limit is $10,000 or $25,000. Some carriers will match your policy limit. For example, if you have $175,000 in property coverage, they’ll cover the mechanical and electrical breakdown up to that amount too.

However, there are some exclusions and limitations that apply to this coverage, such as the aforementioned wear and tear.

The Wear and Tear Exclusion Explained

Here’s where things get a bit technical: MEB covers sudden and unexpected breakdowns, not gradual decline. This means wear and tear, the natural aging and deterioration of equipment, isn’t covered.

Here’s an example. Your North Syracuse movie theater’s AC has been battling scorching summers for years. It’s still cooling, but not as efficiently, despite which temperature you set it to. This gradual decline due to wear and tear wouldn’t be covered by MEB. 

However, if the AC suddenly stops working altogether, leaving your theatergoers sweltering, MEB could help with the repair or replacement costs.

Remember, regular maintenance is key to preventing breakdowns and maximizing your MEB coverage. Just like a healthy lifestyle can help ward off unexpected illness, routine maintenance keeps your equipment running smoothly and in good shape, reducing the risk of sudden failures.

When Should You Use Mechanical and Electrical Breakdown Insurance?

Having MEB coverage can be a lifesaver, but it’s crucial to use it strategically, because it’s not an unlimited repair fund. While some carriers might include it automatically in your policy, treat it as a valuable resource.

Making frequent claims for minor issues can impact your future coverage. Think twice before filing a claim by asking yourself, “Is the cost of the repair manageable on my own?” 

Mechanical breakdown coverage really shines when an unexpected equipment failure could devastate your business. Like if the industrial bread slicer in your Syracuse bakery suddenly died, stopping production of your artisanal loaves. Replacing that $13,000 machine would be a major hit, so that’s the ideal time to tap into your policy.

Be selective and evaluate if the failure will significantly disrupt your business before calling in the insurance cavalry. With smart, high-value claims, your business should keep humming along smoothly.

When Should You Avoid Using Mechanical and Electrical Breakdown Insurance?

Let’s say the sliding entrance doors to your storefront suddenly jam and won’t open. Completely frustrated, you call a repair guy and he says he can fix it for $2,200. With your $1,000 deductible, you could make a $1,200 claim on your breakdown coverage. Seems worth it, right?

Not so fast. While you technically could claim that repair, it’s better to avoid frequently tapping your coverage for minor issues. Too many small claims for stuck doors and other inconveniences can make your insurer see you as high-risk.

The better strategy is to save this coverage for catastrophic equipment failures that would seriously disrupt operations or deal a major financial blow. Like if your restaurant’s entire security system or walk-in freezer went kaput. 

Pay out of pocket for annoyances like sticky doors. Make claims selectively for big-ticket breakdowns that could cripple your business without reimbursement.

Using your policy wisely shows prudence and ensures protection remains available for major crises down the road.

Protect Your Business from Costly Breakdowns with Mechanical and Electrical Insurance

Unexpected equipment failures are inevitable, but their impact doesn’t have to be. By understanding and utilizing MEB coverage strategically, you can transform these stressful situations into minor inconveniences. 

This allows you to focus on what matters most: running your business smoothly and delighting your customers and clients. 

Don’t let a single breakdown disrupt your success. Take control with MEB coverage and face the unexpected with confidence. We can help.

Click the Get a Quote button below to have one of our business insurance experts tailor a policy specific to your business and equipment.

While you’re at it, learn what to do when your business is forced to shut down by reading Business Interruption Insurance: Essential Coverage for Your CNY Business.

Get a Quote

Daniel J. Middleton

Daniel is an accomplished content creator. He has been working in publishing for almost two decades. Horan Companies hired Daniel as its content manager in November 2022. The agency entrusted its messaging to him. Since then, Daniel has written insurance articles, service and pillar pages, and more. All in an effort to educate CNY readers. He's helping them understand the world of insurance so they can make informed decisions.