EB Office Building by 5SjJdD


									                    Office Buildings

                Six Reasons Why You Need Equipment Breakdown Insurance

1     Equipment You Depend On
     Electrical distribution and security systems, HVAC, and ele-
vators are vital to the operation of an office building. This
                                                                                                       Electrical Distribution Systems
                                                                                                       Power interruption can shut down a complex and cause major
                                                                                                       disruption for residents. Electrical panels, circuit breakers and
equipment is subject to sudden and accidental breakdown. Fre-                                          cables are all interconnected. A short circuit in one part of the
quently, this equipment relies on technologies that are sensitive                                      system can affect the whole building. The cause can be as simple
and expensive to repair. In addition, business interruption ex-                                        as a loose connection, dust or moisture. A failure of your electri-
penses can mount, as disrupted tenants move out or demand rent                                         cal distribution system can take weeks to repair and thousands of
relief.                                                                                                dollars. An electrical system is worth 12 to 15 percent of a build-
                                                                                                       ing’s total worth.
                                                                                                       Building Automation Systems
2     Equipment Breakdown Insurance Covers
      More Than Just Repairs
                                                                                                       Today’s “smart” office buildings contain sophisticated electronic
                                                                                                       equipment that operates boilers, air conditioning, lights, elevators,
Equipment Breakdown insurance helps protect you from the costs                                         fire detection and security systems. The sensitive electronics are
associated with losses to your building’s equipment. It pays for:                                      fragile making them vulnerable to severe damage from electrical
 Direct property loss — the cost to repair or replace the dam-                                        surges and spikes. Modern phone systems are also subject to
    aged equipment.                                                                                    damage; these systems’ circuitry is expensive to repair — and
 Costs associated with the time and labor to repair or replace
    the equipment.
 Other expenses incurred to limit the loss or speed restoration
    of your operations.
 The loss value of spoiled products or materials.
                                                                                                       5     Mandatory Jurisdictional Inspections
                                                                                                            Most states and many local governments require boiler and
                                                                                                       pressure vessel inspections. With HSB providing these inspection
 Recovery expenses.
                                                                                                       services, you can avoid local inspection fees in a majority of ju-
Equipment Breakdown insurance covers the physical damage —                                             risdictions. Only the certificate fee would be your responsibility.
and the financial damage — stemming from insured equipment
failure. It’s bottom-line protection essential for today’s technolo-
gy-intensive office buildings.
                                                                                                       6     Typical Losses
                                                                                                            The following are actual losses and the coverage provided for
                                                                                                       office buildings like yours.
3     Protection Against Damage
      Caused By:
                                                                                                       A 600-ton chiller motor shorted. A rental unit was installed to
                                                                                                       keep the building habitable. Initially, it appeared that the motor
 Short circuit/electrical arcing  Power surges                                                       could be repaired. However, once the machine was dismantled,
 Mechanical breakdown  Motor burnout                                                                 inspectors discovered that the core had melted. The rental unit
 Boiler damage                                                                                        stayed on line until the new motor arrived — six months later.
                                                                                                       Property Damage:             $ 100,364

4     Equipment Breakdown Insurance
      Covers Many Types of Equipment
                                                                                                       Extra Expense:
                                                                                                       Total Loss:
                                                                                                                                    $ 130,392
                                                                                                                                    $ 230,756
                                                                                                       The main electrical panel in a 12-story office building shorted
Heat and Hot Water
Many office building use boilers to provide heat and hot water.                                        when an abandoned, but still connected, city pipe filled the base-
Boilers are susceptible to breakdown due to pump or low-water                                          ment with steam. The moisture caused asbestos insulation to
cut-off mechanism failure. Losses worth tens of thousands of                                           crumble. When the power went out, temperatures plunged due to
dollars are reported each year because of boiler breakdowns.                                           cold weather. City pipes filled electrical conduits with water and
                                                                                                       corroded pumps and the elevator machinery.
Air Conditioning
Air conditioning systems contain a variety of parts that can break                                     Total Loss:                  $ 56,183
down and result in costly repairs. For example, a compressor can
be worth $20,000 or more. Due to the ban on CFCs, replacing the
system’s refrigerant can cost thousands, when it was only a $100
expense a few years ago.

This Summary gives general information. For all coverages, conditions and exclusions, refer to the policy.                                                GS9054-13AN (PC) 10/99

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