Equipment Breakdown Coverage Protects the Heart of a Business

Panhandle Farmers Mutual Insurance Company continually seeks to enhance the products and services that we provide to our agents and policyholders. Included with your business commercial insurance policy is Equipment Breakdown coverage. Including Equipment Breakdown coverage enhances the value of our policies, keeps our product competitive and responds to your growing need for insurance from technical risks.

Equipment Has Changed. So Have The Risks.

We believe this to be a very significant coverage enhancement. Equipment Breakdown coverage protects the heart of a business; the equipment, electronics, machinery and systems that businesses rely on every day. Whether it’s for heating, air conditioning, refrigeration, electricity, hot water, security, customer service or other business operations, equipment is essential to a business, its operations and income. Equipment requires special insurance because the risks that can cause damage are unique. Most equipment today include microprocessors, sensitive circuitry and other fragile components and the risk of breakdown are greater than just a few years ago. We developed our product to pay for damage caused by technical risks normally excluded in standard property forms, such as:

• Electrical arcing;
• Power surges;
• Mechanical breakdown;
• Centrifugal force; and
• Boiler explosion, cracking or collapse.

Equipment Breakdown is Common and Often Severe.

Equipment breakdown occurs more frequently and is consequently more severe than what many people realize. It is an exposure that no insured should be without due to the risks being too great. Equipment breakdown losses often total many thousands, sometimes tens of thousands of dollars or even beyond. The root causes of breakdowns are many but can include uncommon events such as:

• Operator or human error;
• Improper start-up or shut down;
• Electrical arcing and short circuits;
• Foreign materials in fuel; and
• Power surges.

To respond to these risks we designed our Equipment Breakdown coverage to meet the needs of the business we underwrite most frequently for you; apartment buildings, churches, restaurants, tenants, office buildings and other commercial accounts. Our coverage is much more than what used to be called “boiler and machinery” coverage. That’s because it covers more types of equipment vital to your clients, including a wide range of “mission critical” equipment, such as:

• Electrical systems including transformers, panels and wiring / cabling;
• Computers and other electronic equipment;
• Telecommunications and voicemail systems;
• Security and fire detection systems;
• Air conditioning and refrigeration systems;
• Elevators and escalators;
• Ovens, stoves and other cooking equipment;
• Heating boilers and hot water heating pressure vessels;
• Electronic cash registers and retail inventory control systems;
• Television, audio and public address (PA) systems;
• And more!

Broader Coverage.
We’ve designed our product to provide broader Equipment Breakdown coverage that protects against more than physical damage. Our coverage includes:

• Property Damage coverage for equipment damaged by a covered accident;
• Business Income insurance for interruptions caused by equipment breakdown;
• Extra Expense for the additional costs incurred after a covered loss to maintain normal operations;
• Expediting Expenses coverage that pays for the additional cost of temporary repairs or to expedite permanent repairs or replacement in order to reduce the loss;
• Spoilage coverage for loss of perishable goods spoiled due to a covered equipment breakdown;
• Service Interruption, Hazardous Substances coverage…and more!

Jurisdictional Inspections – A Built-In Benefit.
We also will provide jurisdictional inspection service for insureds with boiler and pressure vessels. Almost all states require that these objects be periodically inspected by qualified professionals. Providing this service helps our policyholders comply with the law. This jurisdictional inspection service is a built-in benefit to all our policyholders with this inspection obligation. If you have equipment that requires an inspection, please contact:

Inspection Hotline: (800) 333-4677
Email: [email protected]
Fax: (484)582-1811

Panhandle Farmers Mutual Insurance Company is pleased to offer you this new protection to round out your commercial insurance package – it’s just one more way we’re looking out for you. For more information contact your Panhandle Farmers Mutual Insurance Company representative.

Service Line coverage offers protection that goes beyond standard homeowners, dwelling fire policies and utility service contracts.

Homeowners today rely on many exterior underground service lines. Service lines used to supply water, sewage, drainage, heat, internet access and communications are all essential services that support the homeowner’s daily routine.

A leak, break, tear, rupture or collapse could easily damage these exterior underground pipes or wires. As a result, the homeowner could face costly repairs.

Most homeowners don’t realize that they are legally responsible for repairing service lines that are on their property and many don’t have the emergency funds to cover these repairs.

Coverage Highlights, Terms and Conditions

• Property Damage: Physical loss or damage to covered service line that is the direct result of a “service line failure”
• Environmental Safety and Efficiency Condition: Provides additional costs to replace damaged property with materials that are better for the environment, safer for people or more energy or water efficient than the materials being replaced. Up to 150% of the cost of replacement with like kind and quality is covered
• Excavation Costs: Reasonable and necessary costs that are required to excavate to gain access to repair or replace the damaged “covered service line”
• Expediting Expenses: Extra costs to make temporary repairs and expedite permanent repairs or replacement
• Loss of Use: Coverage for additional living expenses and fair rental value
• Outdoor Property: Costs to pay for damaged outdoor property, including but not limited to trees, shrubs, plants, lawns, walkways and driveways. Property must be damaged as the result of a service line failure or during the excavation of covered service lines

• For dwellings that are less than 50 years old, the most we will pay for loss, damage or expense arising from any one service line failure is $10,000. If the dwelling is 50 years or older, we will pay $2,500 per damaged covered service line. However, if the damaged covered service line was newly installed or replaced in its entirety within 50 years of the service line failure, a $10,000 limit will apply. The maximum limit per occurrence under this endorsement is$10,000 regardless of whether a single covered service line or multiple covered service lines are damaged by one service line failure.
• More information regarding limits and deductible can be found in the policy endorsement or contact a representative for more information.

What is Home Systems Protection Coverage?
Home Systems Protection, an enhancement to homeowners insurance, offers a unique solution – contemporary coverage for home systems breakdowns.

Who Needs this Coverage?
Homeowners, condo owners and tenants can all benefit from this coverage. This coverage protects a wide range of home systems and equipment, including a home’s main systems, appliances and electronics. Insureds depend on these various systems that are costly and subject to breakdowns.

Why do Homeowners Need this Coverage?
Homeowners need this coverage because:

• Equipment breakdowns are excluded in most homeowners policies
• Home systems, such as heating, air conditioning and electrical, can be a significant portion of a home’s value
• The alternative home warranties are more expensive and restrictive with respect to covered equipment and limits

What Coverages are Included?
See Coverage Overview for detailed descriptions of coverage

• Physical Damage to Covered Equipment
• Spoilage
• Loss of Use
• Expediting Expenses
• Green
• Pollutant Cleanup and Removal

What are Conditions that would Cause my Claim to be Denied?
Equipment must meet the definition of covered home equipment and a sudden and accidental breakdown must occur to be a covered loss. Coverage excludes any peril covered by the homeowners policy. Please refer to your policy for more exclusions.

If Replacement is Necessary, Will the Item be Replaced Using the Same Brand and Quality?
No, replacement will be made with equipment that is like kind, quality, and capacity as the damaged equipment.

Can Equipment be Upgraded to a More Efficient Model?
Yes when replacement is necessary; up to 150% of the cost of replacement with new equipment that is safer for people or more energy or water efficient is available

Is the Insured Required to Use a Pre-selected Service Provider?
No. The insured hires the contractor of their choice to complete the repair or replacement of covered damaged home equipment. Upon request, Hartford Steam Boiler, our reinsurance partner, can assist the insured in locating a contractor.

What are the Limits Available Under this Coverage?
*The limit of liability is dependent on the age of the “covered home equipment”. If the “covered home equipment” is determined to be 15 years or older, a $1,500 limit per damaged unit will apply. If the “covered home equipment” is less than 15 years old, a $50,000 limit will apply. If a damaged unit of “covered home equipment” is 15 years old or older but was newly installed and first used within 15 years, the $50,000 limit will apply.

The maximum limit under this coverage endorsement is $50,000. A $500 deductible will be applied at the time of loss.

Who is covered?
Coverage and service apply to any “insured” as defined in the Homeowners policy. In most Homeowners policies, “insured” is defined as follows:
“Insured” means you and residents of your household who are:

• Your relatives; or
• Other persons under the age of 21 and in the care of any person named above.

Why do you call it Identity Recovery Coverage?
Because the program is designed to assist victims of identity theft with recovering control of their identity and correcting their credit history. Conventional “identity theft” insurance only reimburses people for the expenses they incur to do all the work themselves. Our Identity Recovery Coverage also includes services to assist insured in restoring their good name and credit.

What services do the case managers actually perform?
Confirmed identity theft claimants are referred to a case manager who guides them through all the steps in the process to correct their credit history or identity records.

This can include:

• Working with credit bureaus, creditors, financial institutions, and others to identify errors and help claimants correct their records;
• Enrolling victims in an electronic credit monitoring service;
• Requesting a fraud alert with credit bureaus where warranted;
• Preparing communications for claimants to send the Social Security Administration, their state’s Department of Motor Vehicles and other government
  entities;
• Providing legal referrals for assistance with court appearances and legal entanglements related to identity theft;
• Working with claimants to check for a recurrence of identity theft problems;
• Keeping detailed records of the steps taken and remaining in the process.

Which identity theft cases are referred to a Case Manager?
Cases are referred to a Case Manager when someone illegally assumes the identity of the insured and uses the victim’s identity to commit fraud or crimes. For example, this includes instances where the thief takes control over the insured’s existing accounts by changing the address to which statements are sent. Other examples are cases where thieves open new accounts or commit other crimes in the insured’s name. Most victims need professional assistance in these cases because by taking control of the insured’s identity the thief is able to operate undetected for a period of time and commit multiple fraudulent acts or crimes. The victim only becomes aware of the crime when they attempt to make a purchase, take out a loan or take some other action only to be denied because their credit history or records show the trail of the criminal. Thieves in these cases leave such a confusing tangle of misinformation in so many different institutions that most persons need help in navigating through the recovery process.

When you say “the case manager will assist the insured,” does that mean that they’ll do all the work and the insured doesn’t have to take any action?
The case manager will assist the victim in all steps that a third party can legally perform. Understand that most creditors will only deal with the victim directly to resolve problems, but the case manager can assist them in making a call or contact and otherwise facilitate the process. Case managers know who to contact, how to contact, what information the creditor or institution will need and how to demonstrate that the victim’s records or accounts have been fraudulently misused. You could think of case managers as a personal trainer at the victim’s side to coach them through the entire identity recovery process.

What about misuse of an insured’s credit card account, do they get any help?
Instances where someone gets a credit card number and makes unauthorized purchases to the insured’s account are not true identity theft. While such cases are irritating, in fact most people can resolve these problems with a call and a letter to their bank or credit card company. Insureds experiencing credit card misuse are encouraged to call our toll free Identity Recovery Help Line to obtain our Identity Recovery Customer Guide. The guide supplies insureds with the information and steps they need to take to resolve these cases themselves.

What if a victim is being subjected to a lawsuit or other legal action, can the case manager offer legal advice?
Our case management service is staffed with experienced specialists but they are not lawyers. We can, however, refer you to pre-screened and qualified legal counsel experienced with identity theft legal issues.

Does the Identity Theft insurance pay for fraudulent charges that an identity thief makes to someone’s account?
Credit card companies, banks, merchants and other financial institutions generally assume most losses from identity theft. The victim needs to notify these companies of course but typically victims are not responsible for more then the first $50 on a bill and in fact can often get the charges removed. But the insured is still stuck with the burden of correcting their credit history and identity records that may have been damaged.

Easing the insured’s burden in cleaning up their records and restoring their reputation is what our Identity Recovery Coverage is designed to do.

If your program is so much better does that mean it’s more expensive?
On the contrary, our Identity Recovery coverage is priced at or below what other companies are charging for expense reimbursement insurance without any personal recovery services.

I received a notice that my personal information was lost or stolen. Does this mean I’m an identity theft victim?
No, most people whose information is compromised never have their identities fraudulently misused. However, you should be especially vigilant in checking on your credit report periodically.