Equipment Breakdown Insurance for Cannabis Businesses
What is Equipment Breakdown Insurance?
Equipment breakdown insurance provides coverage for electrical, mechanical, and computer equipment in the event of a malfunction or breakdown. Even those who don’t own the building they’re operating out of would greatly benefit from equipment breakdown insurance.
It was only a few years ago that cultivators of cannabis relied almost entirely on hand tools to grow their crops. These growers often trimmed their buds with gardening scissors and tended to each plant one by one.
Now, the cannabis industry has been inundated with machinery that significantly increases the production time of cannabis crops. With equipment playing a larger role in the cannabis industry it’s essential that business owners focus on getting equipment breakdown insurance.
What is included in Equipment Breakdown Insurance?
There are five categories that equipment breakdown insurance generally covers:
- Electrical – cables, electrical panels, and transformers
- Mechanical – elevators, water pumps, engines, specialized equipment, and motors
- Boilers and pressure equipment
- Computers and communications – security systems, voice mail, fire alarm systems
- Refrigeration systems and air conditioners
Equipment Breakdown Insurance also covers the following:
- Lost income
- Restoration period expenses
- Bad inventory
- Costs to replace or repair damaged equipment (this includes the times and labor involved in the project)
- Reputational recovery
- Compromised data
While most equipment failures are covered by equipment breakdown insurance, there will be certain instances where you will be excluded from cover. For example, a malfunction caused by basic wear and tear will generally not qualify for coverage.
What are the benefits of having Equipment Breakdown Insurance?
Equipment breakdown insurance provides coverage for any losses incurred due to a breakdown of the equipment you rely upon to operate your business successfully. The policy will cover the repair costs of the insured equipment. It will also cover expenses for any property damaged due to the equipment breaking down. The policy can extend, through its umbrella of coverage, to cover the loss of business revenue caused by equipment failure.
Tips for Choosing Equipment Breakdown Insurance
While equipment breakdown coverage is optional, you should consider getting it if your cannabis business relies heavily upon machinery to produce a quality product.
Look for mandatory inspections
While some business owners may not like the idea of an inspector poking around their machinery policies that offer mandatory inspections can help you to identify early problems in the equipment you rely upon to operate day to day. Fixing these problems early will ensure you won’t experience any down time.
Temporary or rush repairs
Certain types of coverage may protect temporary or rush repairs. For example, if a piece of equipment vital to your cannabis operation goes down, you may have to pay an extra cost for a rush job or a temporary fix. Having insurance that provides the above services will keep your business up and running in the event of a vital piece of equipment breaking down.
Lost business income
Most equipment breakdown insurance policies will provide coverage for lost business income due to a piece of machinery breaking down. However, speak with your insurance broker to ensure you’ll receive adequate coverage.
Property damage liability
Sometimes equipment failure can cause damage to the surrounding property. For example, if a neighbor’s property is damaged because one of your machines exploded than having equipment breakdown insurance can help to offset your liability for covering the damages. Read the fine print to ensure your coverage extends to property damages.
Examine all covered incidents
Look for a policy that provides coverage for potential incidents relevant to your business. Examples of covered incidents include mechanical breakdowns, power surges, or motor burnouts. Before choosing a specific insurance policy, read the fine print and ensure your business will be covered on all fronts.
Get an Equipment Breakdown Insurance Quote
As a cannabis business owner there’s a very good chance you rely upon machinery to keep your operations running as smoothly as possible. Keep your business running by contacting Cannabis Connect Insurance today. Contact us today to receive a quote.
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