An Insurance Policy To Help Combat Downtime

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A few years ago, I was driving home from my office in Michigan on a divided highway (Dual Carriageway as we used to call them in the UK). I wanted to make a left turn at an intersecting road and the law here requires that I drive past the road, make a U turn, then make a right turn at the road (as opposed to just turning left in the first place). So, I am in the left lane when a large pick-up truck, whose driver was in a hurry, comes into the lane in front of me. Two seconds or so later, the driver brakes heavily and I do not respond quickly enough to avoid a crash. This resulted in minor damage to both vehicles. My vehicle has bent metal and a broken headlight. We exchange information and go our separate ways. Luckily, no one was hurt and both vehicles were still drivable.

The next day I take my Jeep to the body shop for an estimate and I get the surprising news that this ‘minor damage’ will cost more than $5,000 US to fix. This amount of money would have been impossible to cover based on my family’s operating budget. At that point, I was very glad my car was insured!

Having insurance for unexpected events such as this is extremely important for a number of reasons. First of all, coverage for one year is a fixed amount and is usually small in comparison to the cost of restoring things to the way they were. It is also easy to plan for. I make fixed monthly payments for the insurance and have peace of mind knowing that if anything unexpected happens, I will be covered.

Maintenance contracts, which offer similar protection for industrial production operations are just as important. Here, a downtime event can be extremely costly. Many manufacturing plants contain complex mechanical and electric systems. Eventually, a piece of equipment will fail. It is nearly impossible to predict when this will happen and the cost of lost production mounts quickly. These unexpected events can put a large burden on an enterprise’s operating budget, as well as plant staff who could be forced into emergency mode at a moment’s notice. Maintenance contracts allow the cost of downtime avoidance to be budgeted on an annual basis minimizing unexpected repair costs. Access to spare parts and technical help (included in many of these plans) also help to reduce the cost and duration of downtime events. Preventative maintenance also helps fix obvious issues and so reduces the chance of events from happening in the first place.

The attached whiteboard animation video helps explain some of the benefits of maintenance service plans. After all, as I discovered with my car, sometimes bad things happen.  Like automobile insurance, a service plan can help you predict costs, reduce these costs when something goes wrong and provide you with peace of mind.

Click here to view the video

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