Boiler and Machinery Damage by Testing Excluded?

The current boiler and machinery policy has an exclusion pertaining to damage to covered equipment undergoing a pressure or electrical test. What does this include? Our situation deals with a piece of equipment that exploded during the start-up phase of the production process. Does the exclusion apply under these circumstances?

New York Subscriber

It is our opinion that the start-up phase of a piece of equipment is distinguishable from testing, and that the start-up process is not a test of the equipment. Any testing of the equipment that might be needed is surely something to be done before any and all other procedures leading to beginning production are implemented.

In previous boiler and machinery policies, specific kinds of testing for specific classes of objects were excluded under the special provisions section of some, but not all, object schedules. As you noted, under the current form (equipment breakdown protection coverage form), the exclusion is for damage to covered equipment (a defined term) undergoing a pressure or electrical test. This language limits the extent of the exclusion to damage that occurs only while a pressure or electrical test is being done, and unless the insurer can show that the start-up was in reality a pressure or electrical test, the exclusion does not apply in this instance.

 

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