Each strata complex has equipment that can often be extremely critical in the day-to-day operation of the property. For example, if the heating or air-conditioning systems fail during times of severe weather, residents may experience discomfort and it can also present health hazards.

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To help minimise the disruption to the occupants of the property, many strata insurance policies provide an optional section of cover called “Machinery Breakdown” or “Equipment Breakdown” to guard against monetary losses as a result of the unplanned and unexpected breakdown of machinery. There are various levels of cover available for Machinery Breakdown, as well as a blanket coverage option.

What types of equipment fall under Machinery Breakdown?

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• Air handling units
• Other heating, ventilation, and air-conditioning equipment
• Boilers and thermostats
• Chillers and refrigeration units
• Water pumps
• Sprinkler distribution pumps
• Electrical equipment and control panels
• Back-up electrical generators and compressors

What does Machinery Breakdown cover?

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In addition to the actual cost to repair/replace the equipment, certain policies will quite often include additional benefits such as:

• Expediting repairs (including overtime costs)
• Express or air freight costs
• Hiring necessary temporary replacement items
• Temporary accommodation or loss of rent cover

Staying one step ahead

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It is good practice for strata complexes to have an asset schedule that lists all machinery and equipment at the property to ensure there is appropriate cover in place. By having adequate machinery breakdown coverage, strata owners can have peace of mind, knowing they are well-equipped to handle unexpected breakdowns and minimise the resulting financial and operational consequences.

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To discuss your Machinery Breakdown insurance requirements, please feel free to reach out to your Honan contact.

Anthony Chitty

Client Manager

Anthony.chitty@honan.com.au

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