What is typically excluded under an Equipment Breakdown Policy?

An Equipment Breakdown Policy is designed to cover sudden and accidental damage to equipment due to various causes, particularly mechanical or electrical failures. However, there are specific areas where coverage does not apply, and understanding these exclusions is crucial for identifying coverage limitations.

Internal working pressure over specified limits is one of the situations that typically falls outside the coverage of an Equipment Breakdown Policy. This exclusion reflects the understanding that equipment should operate within designated safety parameters. When the internal pressure exceeds these limits, it indicates that the equipment is being subjected to conditions beyond its designed capacity, which can lead to catastrophic failure. In such cases, the damage is often considered a result of improper use or failure to maintain the equipment correctly rather than an accident or breakdown that the policy intends to cover.

Other exclusions, such as accidents caused by human error, environmental damage, or natural wear and tear, generally indicate issues related to maintenance, operation practices, or gradual deterioration rather than sudden and accidental occurrences, aligning with broader insurance principles that seek to limit claims resulting from poor management or aging processes. Thus, the limitation on coverage for internal working pressure over specified limits distinctly highlights the responsibility of the insured to operate equipment within safe parameters as an important aspect of risk management.