Equipment Breakdown Insurance – or EBI – continues to enjoy significant growth and is one of the broadest commercial offerings spanning a wide variety of industries. So why aren’t more brokers selling it?
“It is a necessity for virtually any business that requires functioning equipment and utility services for business to operate and remain profitable,” says Louis Vatrt, RSA’s AVP, Construction and Engineering. “There are growth opportunities for this line of business, and we’re dedicated to working with our broker partners and customers to capitalize on these opportunities.”
What may be holding back brokers are some common misconceptions about EBI.
“One of the most common misconceptions is that if a risk does not have a boiler, EBI is not needed. This is not the case,” he says. “EBI is designed to reduce the gaps in a property policy and through periodic inspection further reduce the chance of malfunction among boilers and other manufacturing equipment, including: pressurized, mechanical, electrical and or electronic equipment. In other words, EBI provides insurance coverage for all equipment. EBI is an integral part of a commercial property insurance program.”
The value of the risk manager role is considerable in EBI, as he or she can play a vital role in assessing the risk and the coverage that is needed.
“The risk manager role is extremely important for high hazard/complex risks as they will understand the benefits of a monoline EBI policy compared to a combined property/EBI policy,” says Vatrt. “The risk manager, in certain business segments such as power generation, understands the importance of an EBI policy for their risk, and provides information and access to facilities so EBI can assess the risk to provide the right terms and conditions.”
Vatrt says that there is still the need to be a strong, dedicated underwriting team for low and high hazards.
“Within our overall team of 23 underwriters at RSA, we have dedicated teams for different segments of the business within EBI,” he says. “One team handles low hazard transactional and automated business while the other handles mid-market to high hazard complex type business.”
Risk control services are another key component to providing support to underwriters, adds Vatrt, who employs a team of 21 risk control specialists that comprise one of the largest multi-skilled teams in the marketplace.
“Underwriting and risk control services takes a collaborative approach with the insured and broker to assess risk, resolve claims and provide loss prevention recommendations to protect the insured’s business,” he says.
Opportunities for brokers
EBI is a necessary cover and presents an opportunity to increase coverages across all lines of business and to cover a bigger portion of a client’s risk portfolio, says Vatrt.
