You remember Mr. Bob from a prior blog where we talked about how he makes the most delicious donuts in Western North Carolina and also how he may or may not need to be on LinkedIn? Well, Mr. Bob has been really busy lately making the donuts – he’s even been nominated for ugliest apple ugly on a blog. (YES please go and vote online!) He’s so busy he’s decided to invest in some new equipment and enlarge his kitchen at the shop.
I like to think that this is in part due to the fact that a few months ago his mixer broke.
As you might imagine a mixer is a key piece of equipment for a donut maker. You can see in the photo that the kind of mixer that it takes to get the job done isn’t your mother’s counter top variety with the matching quilted cover. Mr. Bob’s mixer is several feet tall and holds a LOT of dough. The mixer itself is worth a significant amount of dough as well – money that is. They can be expensive to buy but are absolutely necessary to the operation of the shop. So when his mixer broke he had to put the “CLOSED” sign on the door for almost a week while he waited for the repairs to be made.
Now during that week while he waited to get the mixer repaired he called me to ask if his insurance might help him. How would insurance help him you might ask? You’re probably thinking about the typical business property policies that are sometimes fairly limited in coverage. It might only cover something happening “TO” his mixer like an electrical surge or fire or theft.
But a mixer just breaking down? Yeah not all business policies cover that.
However I knew his policy included equipment breakdown. This is to cover damages or replacement of equipment needed to run the business even when its simply mechanical breakdown. There are exclusions but I felt sure the mixer would qualify based on the definitions of equipment in his policy. This coverage can address breakdown of many types of equipment including a heating or air system since most businesses need those in order to operate as well as smaller but necessary items.
Like a mixer in a donut shop.
I also had included loss of income on his business-owners policy. Loss of income is important because when your business is shut down due to a covered loss then you can actually get reimbursed for what you normally would have made on those days. In some cases loss of income could really amount to a large sum if the business was shut down for weeks into months. The coverage has limitations but it can be written for up to a year’s worth of income and even include extra expenses incurred from getting business going again or relocating if needed.
So I turned in the loss to his insurance carrier and they paid. When I went by to get a picture of the now- repaired mixer, Mr. Bob and I discussed how pleased he was with the claim handling. He said he only ended up about $50 out-of-pocket.
Which brings us back to Mr. Bob getting to upgrade his shop with a bigger kitchen and some new equipment. What if he’d had to absorb the full cost of repairing his current mixer as well as weathering the loss of almost a week of income? Maybe he’d have had to wait on expanding his business, but instead he’s going full steam ahead.
What if in your business you had to stay closed awaiting a repair or worse, a rebuild of the business location? What if you couldn’t open because of a mechanical breakdown? Equipment breakdown and loss of income are both coverages not always included or sometimes limited that any small business should consider putting in the “mix”.