© Getty Images

Equipment breakdown emerging risks

6 key emerging equipment breakdown risks

    alt txt



    Equipment continues to evolve with advanced technology and Cloud computing, but breakdown risks are becoming heightened

    Our engineering experts outline six key emerging equipment breakdown risks:

    1.     Technological complexity

    As equipment becomes more advanced, the risk of breakdown due to complex technology increases. For example, losses can be caused by the breakdown of very small, but important components, such as sensors.

    2.     Cyber-threats

    The growing trend of digitalization exposes equipment to heightened risks of cyberattacks. For example, malware that infects machinery software not only causes damage to targeted equipment but can spread to other locations within a facility.

    3.     Aging infrastructure

    Aging equipment and infrastructure are more susceptible to breakdowns, especially if maintenance and upgrades are not adequately performed.

    4.     Extreme weather

    Extreme weather events caused by climate change, such as hurricanes, floods, and wildfires, can damage equipment and increase the likelihood of breakdowns. For example, equipment that is exposed to flood waters requires adequate restoration before re-energizing, due to moisture and contamination.

    5.     Remote monitoring

    While remote monitoring technology can enhance efficiency, it also introduces the risk of equipment breakdowns due to data breaches or system failures. For example, a cyber attacker infiltrating a boiler automation system can manipulate sensor data by feeding false information into the control system, causing the boiler to malfunction.

    6.     Supply chain disruptions

    Global supply chain disruptions which may result in longer lead times for equipment and parts needed for the repair of a loss. This can result in a higher business interruption and cost to repair.

    This article is for informational purposes only and is not intended to convey or constitute legal advice. HSB makes no warranties or representations as to the accuracy or completeness of the content herein. Under no circumstances shall HSB or any party involved in creating or delivering this article be liable to you for any loss or damage that results from the use of the information contained herein. Except as otherwise expressly permitted by HSB in writing, no portion of this article may be reproduced, copied, or distributed in any way. This article does not modify or invalidate any of the provisions, exclusions, terms or conditions of the applicable policy and endorsements. For specific terms and conditions, please refer to the applicable insurance form. Posted on June, 2024

    Subscribe to our newsletter 

    We want to provide you with insurance, engineering and technology information you need to stay ahead of the game.