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Equipment Insurance
Equipment Insurance is a very broad insurance term that has been used by people who want to secure the purchase of various equipment.
What Equipment insurance does is that it helps protect both the lender and the borrower who are financing a particular equipment.
This particular insurance, when entered correctly, will definitely help you to reduce risks and losses in case the particular equipment you are financing gets damaged, or lost.
If you are afraid of losing everything in case your equipment gets stolen, don’t worry, all you have to do is to get equipment insurance.
It will help both the lender and borrower recoup their financial investments in case of unforeseen circumstances that may arise.equipment insurance in this case is more for protecting the financed equipment itself, rather than the loan.
Let’s take for instance that you’re buying a new phone on a payment plan.
Equipment insurance will try to protect just the phone itself, for instance, If you find yourself in a situation where your phone gets stolen or someone let’s say a toddler smashes it, equipment insurance can help you get it fixed or even replaced.
This way, you’re not stuck paying for a phone you can’t use. What we’re saying is that Equipment insurance is a type of insurance policy that protects the equipment from potential damages.
We’ll look at some types of equipment insurance
Types of Equipment Insurance
Now there are several types of equipment insurance, we’ll look at some of these insurances and how best you can follow them up.
Here are some examples:
- Property Insurance: Property insurance is one of the most popular types of equipment insurance. What property insurance does is that it covers the loss or damages to the property that was insured.
For example, if a natural disaster like a tornado causes damage to the financed equipment. Property insurance will cover the repairs or replacement costs.
I remember a friend who installed solar in his home, the Solar was under equipment insurance, A heavy tornado affected his area and the Solar was greatly affected too.
The company in charge of his property Insurance significantly helped him to set up a new one.
So you see, if your insured equipment is stolen or damaged by fire or any other disaster, Property insurance will definitely make sure it’s replaced.
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2.General Liability Insurance: This is another popular Equipment Insurance that you should know, this particular type of insurance always happens when an equipment causes pains or damages to a customer or let’s say a third party.
For instance, If a customer trips and falls over a piece of equipment in let’s say the borrower’s store.
General liability insurance will have to cover any medical expenses or legal fees .
If the customer decides to sue, another scenario is a situation where a customer’s property is damaged while trying to use the insured equipment, the general liability insurance will also have to cover the cost of repair or replacement of that customer’s property.
Another situation that might also demand general liability insurance is let’s say a situation arises where a delivery driver gets injured while trying to load or unload an insured equipment, the general liability insurance will have to cover the medical bills as well as any lost bills that may arise as a result of the situation.
3.Business Interruption Insurance: if as the borrower you find yourself in a situation where something happens and you are unable to make use of the insured equipment simply because of an accident or let’s say damages to the equipment,
Business Interruption Insurance will have to compensate you for the lost incomes you would have been receiving if the equipment was still operational, take for example,
A burst pipe causes flooding in your store, and in the process the financed equipment got damaged thereby forcing you to close for repairs.
Business interruption insurance can help make up for your lost income during the closure.
Another scenario is let’s say the insured equipment got stolen, Business interruption Insurance can cover the cost of lost income while you work towards replacement.
Benefits of Equipment Insurance
Just like most insurances there are so many things you stand to benefit with equipment insurance, we’ll look at some of these benefits as well as how much beneficial they could be to you.
1.Risk reduction: One of the biggest benefits you get from equipment insurance is the risk reduction benefit, with Equipment insurance, you are sure to reduce the financial risks that are associated with owning and operating the equipment.
Take for instance there’s a fire outbreak and your equipment got damaged as a result of the disaster, equipment insurance will definitely provide coverage for the damages, this will of course reduce the risk of you funding a brand new equipment.
2.Financial protection:
Another benefit is that In case of accidents or maybe disasters you weren’t expecting, equipment insurance can also help you to cover the cost it will take to repair the equipment or even replacement, this will no doubt protect both you the borrower and the lender from financial losses .
Imagine if there’s no equipment insurance, you will have to finance the cost of repairing the equipment from your hard earned money, so you see, equipment insurance will give you the financial protection you need to secure your insured equipment.
Peace of mind: Obviously peace of mind is underrated by most of us, imagine making use of your equipment with the knowledge that it’s insured,knowing that your equipment is insured can definitely give you peace of mind, if not for anything else, it will allow you the borrower to focus on running your business without worrying about losses that make incur from your equipment.
Conclusion
In this blog post, we’ve been able to extensively discuss everything you need to know about equipment insurance. We talked about the definition, and we also discussed the different types of equipment insurance out there.
We analyzed the various benefits that come with getting your equipment insured. Next time you are thinking of getting that phone, tools and other equipment, make sure you get them insured as it will save you from a lot of damages.