Equipment Maintenance Insurance...

Barbara Weltman When you buy office equipment, a security or phone system, cash registers, medical equipment or any other similar property, you are usually protected if things break down during a warranty period, typically 90 days or more. But, in the past, if you wanted added protection, you had to buy an extended warranty contract or an equipment maintenance agreement.

Now there’s an alternative: equipment maintenance insurance (EMI), explains Will Soltwisch, business development manager at Zurich North America Commercial, an insurance company ( While this type of coverage has been around for several years, it is under-utilized by small businesses.

How it works
You purchase insurance coverage that will pay for the cost of any repairs to your equipment. The insurance covers time and materials. In some instances, it may pay for the rental of a replacement unit (such as for 10 days) if the equipment has to be shipped out for servicing.

The insurance runs for a one-year term; and is renewable.

Advantages over maintenance contracts
Simplicity.You can use one EMI policy to cover all of your equipment. As the basic warranty on each item expires, you can roll coverage for that item into your insurance coverage. In contrast, each maintenance contract applies to a single piece of equipment that must be tracked individually to determine your coverage.

Cost. Equipment maintenance insurance can run up to 20% less than the cost of a traditional maintenance contract. Zurich, for example, reviews your equipment, does a risk analysis and then sets a premium that usually is more favorable to you than other protection.

Control.You, and not the insurance company or another party, decide who should make the repairs and when. In contrast, repairs under maintenance agreements are usually handled by someone designated for this purpose (not necessarily someone you select).

Insurance aspect.When the cost of repair exceeds the value of the equipment, at its option the insurance company may offer a cash settlement. For instance, say you have a five-year-old photocopier that will cost $500 to repair. If its insured value is only $300, the insurance company will pay you the cash instead of repairing it. This cash can serve as a down payment on a new photocopier.

Insurers offering coverage
In addition to Zurich North America Commercial, there a few other carriers offering this coverage, but some may limit their services to credit unions, municipalities and school districts. If you are interested in EMI, talk with your insurance agent or contact Zurich directly. Copyright © 2005 by, Inc.

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