Electronic Equipment Insurance

What is Electronic Equipment Insurance?

Electronic Equipment Insurance (EEI) is an all-risk policy that covers electronic and electrical equipment against sudden and unforeseen physical loss or damage from any cause not specifically excluded. It is built for sensitive, high-value equipment such as IT hardware, medical devices, control systems and communication equipment.

A fire policy covers electronics only against the named perils it lists. EEI goes further, covering accidental damage, short circuit, surges and many internal electrical causes too. It sits within our industrial and engineering insurance range and works alongside your property cover.

What Electronic Equipment Insurance covers

Section I: Material damage

Damage to the insured equipment from causes including:

• Short circuit, overvoltage, induction and electrical surges.
• Fire, lightning, smoke, explosion and soot.
• Water damage, humidity from sudden events, and sprinkler leakage.
• Accidental damage, dropping and impact.
• Theft and burglary, subject to security conditions.
• Carelessness, lack of skill and operator error.
• Flood, storm and earthquake, where included.

Section II: External data media

Cost of replacing damaged external data carriers such as tapes, removable drives and discs, and of reproducing the lost information, if it must be restored.

Section III: Increased cost of working

Additional costs of using substitute equipment, hiring machines, paying staff overtime or outsourcing work while the damaged equipment is repaired or replaced, for an agreed indemnity period.

What is not covered

• Wear and tear, gradual deterioration and the effects of normal use.
• Faults that the supplier or manufacturer must fix under warranty or a maintenance contract.
• Cosmetic damage such as scratches that do not affect function.
• Consumable parts such as bulbs, valves, toner, belts and batteries, unless damaged together with the equipment.
• Loss of data caused by software errors, viruses or programming mistakes. Those risks fall under cyber insurance.
• Mysterious disappearance and shortages found at inventory.
• Wilful acts of the insured and damage from experiments or tests beyond design limits.

Who needs EEI

• Hospitals, diagnostic centres and clinics with CT, MRI, X-ray, ultrasound and lab analysers. For medical practices, we often combine EEI with insurance for doctors and hospitals.
• Offices and IT companies with servers, networking gear, UPS systems and desktops.
• Factories with PLCs, SCADA systems, CNC controllers and test instruments.
• Broadcasters, studios and telecom operators with transmission and editing equipment.
• Housing societies and commercial buildings with CCTV, access control and building management systems.

How the sum insured and premium are decided

EEI is insured on a new replacement value basis: the cost of replacing each item with a new one of the same kind and capacity, including freight, duties and installation. Because electronics lose market value fast, businesses often insure at book value by mistake, which leads to a proportionate cut in claims. Where a model is obsolete, the value of the nearest current equivalent is used.

Premium depends on:

• The type of equipment and its sensitivity.
• The environment, such as air-conditioned server rooms versus factory floors.
• Surge protection, UPS and fire suppression in place.
• Whether maintenance contracts cover breakdowns.
• Deductibles and claims history.

How MILES helps

• We help convert your asset register into a clean EEI schedule at current replacement values.
• We compare wordings from several of the 16+ insurers we work with, especially on theft, portable equipment and data media.
• We check how EEI fits with your fire, Machinery Breakdown and cyber covers, so nothing is insured twice or left out.
• We advise on whether Sections II and III are worth buying for your operations.
• We help you through the claim, from surveyor visit to settlement, with our claims team.

What we need for a quote

1. Equipment register with description, make, model, serial number and year.
2. Replacement value of each item or group of items.
3. Premises addresses and a note on the environment where equipment is kept.
4. Details of maintenance contracts and surge or fire protection.
5. Whether you need data media, increased cost of working or portable equipment cover.
6. Claims history for the last three years.

Cover, exclusions and premiums depend on the insurer’s policy wording and underwriting. MILES Insurance Brokers Pvt. Ltd. is an IRDAI-licensed direct broker (Life & General, Reg. No. 954); the insurance is issued by the insurer. Insurance is the subject matter of solicitation.