Equipment Breakdown Coverage for Art Museums
Museums preserve and display artifacts, paintings and sculptures. These collections and exhibits reflect the history of a civilization, group or individual.
A museum’s business income is derived mostly from visitor donations, private donors, concessions and special events. Extended closings as a result of unplanned business outages can often lead to a damaged reputation and loss of business income, making timely recovery efforts critical. Museums are increasingly engaged in activities that use the internet and technology to expand offerings to patrons such as simulators and interactive learning stations. Additional activities include the sale of novelty items such as t-shirts and souvenirs, as well as hosting events like business gatherings, wedding parties and school graduation celebrations.
Museums have several insurable equipment exposures, such as air conditioning units, boilers, motors, compressors and other types of HVAC equipment to keep the museum’s contents at the right temperature and humidity. Museums use all types of business systems including computers, scanners, telephone systems and security equipment.
Many of the boilers and pressure vessels require jurisdictional inspections, which are performed by the equipment breakdown reinsurer at no additional cost. Electrical breakdown, followed by mechanical breakdown are the most prevalent causes of loss in museums. Boiler and pressure vessel failures account for the lowest frequency of loss.
Typical Losses
A hermetic motor used for an air conditioning unit experienced electrical arcing damage. The electric motor required replacement.
Property Damage: $4,000
Electrical damage occurred to the main circuit breaker which also caused an extended power outage. As a result, the museum could not hold special events that had been previously scheduled leading to a business income loss.
Property Damage: $39,000
Business Income: $10,000
The museum experienced an externally generated power surge that caused damage to multiple security system components including the cameras. Due to the extensive damage of multiple components and compatibility issues with obsolete components, the entire system was replaced.
Property Damage: $33,000
Exposures
Boilers and Pressure Vessels: Sanitary Hot Water Supply Boilers, Comfort Heating Boilers
Mechanical Equipment: Air Conditioning Compressors, Liquid Pumps, Emergency Generators, Elevators
Electrical Equipment: Motors, LCD Monitor/Televisions, Transformers, Fan/Blowers, Emergency Lighting Systems, Electrical Service Panels, Telecommunications Equipment, Desktop PC, Servers, and WiFi, Network Equipment, Security Systems, CCTVs, Central Music/Sound Systems, Special Effect Lighting Systems
Time Element: Business Interruption, Extra Expense, Service Interruption
Class Specific: Spoilage/Consequential Damage
Be proactive! Develop a plan, and execute!
