Building owners and engineers overlooking a construction site with builders insurance
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Course Of Construction

Equipment Breakdown coverage

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    What is Course of Construction Equipment Breakdown coverage?

    Course of Construction Equipment Breakdown coverage is in place during construction. It pays for repair or replacement due to accidental breakdown of insured equipment that is damaged by such things as electrical arcing, mechanical breakdown, power surges, and more. It can also be extended to include coverage during commissioning and testing.

    Why do I need Course of Construction Equipment Breakdown coverage?

    The coverage fills key gaps in builder’s risk property policies. A building’s vital equipment may be operating for months during construction, until the project is handed over to its owner. During this time, equipment is exposed to a wide range of breakdown perils and risks.

    Electrical engineers in boiler room
    © Getty Images

    Builder’s Risk property policies typically exclude loss or damage caused by electrical arcing and mechanical breakdown and may not cover the high risk phases of equipment testing, commissioning and early operation prior to project completion.

    A new building's electrical system, heating, air conditioning, and other major equipment may be operating for months during construction. Aside from installation and testing, the work itself depends on lighting and electricity for contractors' tools. This equipment can be damaged by mechanical and electrical breakdown. Course of Construction Equipment Breakdown insurance provides added protection that may not be covered elsewhere.

    Electrician testing for voltage in fuse box of a construction site
    © Getty Images

    Testing can be covered

    Equipment has a higher chance of failure when it's first put into service.

    Any equipment that is faulty, or installed incorrectly, or is the wrong equipment for the application, is likely to fail immediately or within days.

    Won't warranties pay for it?

    Warranties have limits. They typically exclude losses caused by outside factors, such as temperature extremes, or improper installation. When warranties do apply, they generally don't pay for costs to remove the faulty unit and install the replacement. Course of Construction Equipment Breakdown insurance will.

    Since 1875, HSB Canada has been the leader in providing the specialized underwriting and technical skills required for inspecting and insuring pressure vessel, mechanical and electrical equipment. Expert knowledge combined with broad coverages ensure the right choice of insurance for any project.

    Interested in learning more?