Question

Boiler and Machinery insurance provides protection against:

(A) Loss of business income arising from the sudden failure of a company's machinery and equipment that causes a business to shut down until repair or replacement is complete.

(B) The costs of repair or replacement of a company's heavy machinery such as boilers, hot water or steam boilers, refrigeration or air conditioning equipment, generators and compressors, transformers and turbines, and other machinery.

(C) Damages to outside mobile equipment caused by wind, rain, hail or freezing.

(D) Losses arising from the sudden and accidentally combustion of flammable materials used to service a company's machinery and equipment.

Answer 1

Boiler and Machinery insurance protects against the costs of repair or replacement of a company's heavy machinery and equipment, such as boilers and generators, which is correctly described in option (B). It covers significant financial losses due to machinery breakdowns.

Step-by-step explanation:

Boiler and Machinery insurance is a specialized type of insurance that provides coverage for significant financial loss due to the failure, malfunction, or accidental damages to boilers, machinery, and equipment in a business.

This insurance is essential as it helps firms to guard against the financial impact of unexpected breakdowns that can result in expensive repair or replacement costs and potential business interruptions, which are risks that boil down to the core concept of insurance.

Option (A) refers to coverage for loss of business income due to machinery failure, which is also an aspect of this kind of policy.

However, the precise protection offered by Boiler and Machinery insurance is most accurately described in option (B), which mentions the coverage for costs of repair or replacement of heavy machinery and equipment.

Options (C) and (D) refer to other types of incidents that are not typically covered by Boiler and Machinery insurance policies.

Thus, the correct answer to the question posed is option (B).