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Fundamentals of Equipment Insurance

The need for insurance arose from the fact that there are inherent risks in everything. To protect one from these risks, it becomes necessary to take out insurance. Insurance can come in various forms, and one of the common forms of commercial insurance is equipment insurance. The essence of equipment insurance is to cover the loss or damage to equipment or property used for commercial purposes. Equipment insurance usually becomes necessary if you use expensive equipment that cannot be easily replaced in your business. The equipment usually used in the mining industry falls under this category, with most of them being heavy-duty equipment that is only acquired through equipment finance on many occasions.

If you are considering getting equipment insurance but don’t know how to go about it, you can come to us to assist you. We can connect you to industry-specific insurance companies that provide insurance for mining equipment and the industry. The advantages of using this kind of insurance provider are that they fully understand the industry and how it works and can give you sufficient insurance coverage. Mining equipment insurance generally covers Fire, Explosion, Lightning, Malicious damage or destruction, Flood, Storm, Earthquakes or any other natural disaster, Subterranean fires, Accidental loss, damage, or destruction and theft.

Under any form of insurance, the insurance company will be responsible for paying the cost of any liability that you incur as stated in the policy. In exchange for them bearing the risk, you will have to pay premiums. There are generally limits on how much cost the insurance company can carry, and several factors influence the kind of premium you will get. If your business is associated with significant risk, you may find yourself paying more premiums than you normally will.

The equipment covered under the agreement generally includes all your business equipment, most likely within the confines of your business space or worldwide. If the insurance covers all your equipment on a worldwide basis, this is usually called all risks cover and touches on every piece of equipment you have within or outside your premises. It is ideal if you take equipment out regularly and ensure that they are fully protected no matter which part of the world. For businesses in the mining industry, the best insurance policy will be one covering the equipment no matter where it is

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Difference between interruption insurance and equipment insurance

Business equipment insurance is not the same thing as business interruption insurance. While business equipment covers the property, it will not cover any revenue loss due to damage or loss of property. It is business interruption insurance that will cover the decrease in income and any increase in cost or additional expenses resulting from the insured damage or loss of property.

Disclaimer: This information is only available as a general guide on the government policies. It is derived from the official Australian government sources. We do not bear any responsibility for the commentary and analysis of this public domain information nor any liability for how the facts are interpreted. It is recommended that you speak with an accountant or financial advisor to get precise information and advice on your situation.