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Warning: What the electrical and electronic
equipment companies are not telling you about the
new hazards you face!
Leland J. Hendrie CLU
President, PHD Insurance Brokers, Inc. |
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How often have you seen
a LED display flashing 12:00 on you clock, microwave
oven or other electronic equipment? If you’re like most
of us, this happens so often that we begin to take it
for granted. But what does this mean to us? Is it just
the time and trouble to reset all of them? No! It is a
lot more, and the manufacturers are not warning you
about the dangers you face. The new technology such as
interconnecting equipment and other gadgets can cause
electrical breakdowns and damage equipment in
interrelated systems that can cost you big money.
What’s the problem? A momentary power loss
will instantly shut down any equipment without a backup
energy source. Power is lost by all components in a
system at the same time, instead of a pre-programmed
shutdown sequence. That’s a problem because equipment
may require that a certain sequence be followed during
shutdown and start-up.
Is this a problem for you or just for business? It is a
problem for both. Everyone, including business, runs
their equipment on electricity. The uncontrolled
shutdown may cause equipment damage. Even if it doesn’t,
the system may not be in the proper condition to
re-start. When the power is suddenly restored, equipment
may start up simultaneously, instead of following a
necessary sequence, and further damage may result and
cause a breakdown.
The point is, unexpected power interruptions can damage
equipment, both when the power goes off and when it
comes back on again.
Electrical losses are rising. Breakdowns
that result from a lack of power are becoming very
common. Insurance company claim data shows that
electrical losses now surpass mechanical breakdowns.
Refrigeration and air conditioning losses have leveled
out since the late 1980’s, while electrical and
electronic equipment losses have sky rocketed since the
early 1980’s. So, the next time you reset that digital
clock, think about what’s at stake here. Those flashing
lights are a warning – new technology brings new risks
that can cost you dearly.
Pool and Spa Equipment Breakdowns. You no
longer have to live in California, Arizona, Florida or
other states where homeowners use their pools or spas
the year around. People in the colder regions have put
spas in their homes or have their pools built within
their home or in a separate structure.
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What
equipment does it take to operate a pool or spa?
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Centrifugal pumps and
motors
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Filters and filtration
systems
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Water heaters
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Two-speed pumps for spas
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Heat pumps (compressors,
fans, heat exchangers)
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Spa air blowers
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Generators
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Automatic pool covers
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Doesn’t my
homeowners or business policy provide coverage for this?
Most homeowner and business policies provide a range of
protection; however, equipment breakdowns are usually
not covered. To fill this gap you need to consider
enhancing your homeowners or get an additional coverage
if you own a business policy.
What else can cause my risk of loss? The
change of seasons increases the chances for equipment
breakdowns. Air conditioning breakdowns are often traced
back to a lack of attention when the equipment was shut
down at the end of the cooling season. Likewise, heating
equipment is damaged because it is pressed into service
without proper maintenance. Most companies that provide
breakdown type coverage offer loss prevention tips that
will help you avoid losses. Ask you agent about this.
Does he even know?
Sometimes equipment
breakdowns have the most unlikely causes.
Although there are many causes of equipment breakdowns,
accidents involving animals always get people’s
attention. You might be surprised how many breakdowns
are caused by animals and how much the damage can cost.
Electrical equipment is exposed outdoors, or in cellars
and conduits. Boilers in basements and rooftop air
conditioning units attract birds, rodents, squirrels and
other animals. Here are just a few examples of those
types of losses.
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Snake shuts down city.
A snake squeezed into a breaker box in a municipal
utility substation, knocking out power to a city.
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A bat flew out of a
voice processor in an attorney’s office when it was
released by the troubleshooter who was trying to
find out the cause of the shutdown.
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A horse being treated
for a leg injury kicked the head of a shockwave
therapy machine. The veterinarian said sparks later
shot from the machine, which is used to help animals
heal broken bones and caused the coil, transducer
and therapy head to be damaged.
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Birds flew into high
voltage lines connected to a transformer for a
community building complex, disrupting the power
supply and damaging 14 roof top air conditioning
units. Extensive repairs were required to repair
the air conditioners.
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Two dead lizards were
found in a main electrical panel and circuit breaker
at a regional wastewater treatment plant burning out
the connections.
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A squirrel shorted out a
utility transformer and caused power to fluctuate
inside a nearby service station and mini-mart. The
accident damaged a snow cone ice shaving machine and
a beer cooler’s refrigeration compressor.
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Electrical equipment is a leading cause of structure
fires. When an electrical system breaks down,
it’s not only expensive to make repairs, but can be a
disaster in terms of fire loss as well.
The National Fire Protection Agency reports that
electrical malfunctions are a leading cause of fires in
homes and commercial buildings. From 1999-2002, fires
caused by electrical distribution or lighting equipment
killed 240 people and resulted in more than $1 Billion
in damage, according to the NFPA.
What do you need to do now? Call your
agent and find out what you need to do to cover these
types of losses. For only a few dollars, coverage can be
provided to you regardless of whether you’re a homeowner
or business owner.
At PHD Insurance Brokers we are here to help you
understand and deal with this problem. Call us at (800)
640-4743 or (714) 534-6310 or visit us on our website
www.phdinsurancebrokers.com
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Please contact PHD Insurance
Brokers, Inc. at:
(800) 640-4743 or (714) 534-6310 |
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Or
Fax (714) 543-2943
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E-mail
Info@phdinsurancebrokers.com
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Visit our website at
www.phdinsurancebrokers.com |
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© 2006, Leland J.
Hendrie. The reader assumes all responsibilities for
his/her own actions in regards to any items discussed in
this report. Adherence to all applicable laws and
regulations, federal, state and local, governing the use
of any product or service described in this report in
the US or any other jurisdiction is the sole
responsibility of the reader. The publisher and author
assume no responsibility or liability whatsoever on the
behalf of the reader of these materials. The reader is
encouraged to consult directly with his/her insurance
professional. |
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