What covers a generator or chiller failure at a senior living community?

A commercial property policy covers damage from external causes. It generally excludes loss caused by mechanical breakdown, electrical arcing inside equipment, and boiler or pressure vessel failure. Equipment breakdown coverage buys those causes back, and it also covers the resulting damage to other property and the business income loss.

In a senior living building the relevant equipment is the emergency generator, the chillers and boilers, the elevators, the commercial kitchen equipment, the electrical service and switchgear, and increasingly the building automation and nurse call systems.

Loss of cooling in a licensed care building with a frail population is a life safety emergency, not a comfort problem, and it has produced fatal outcomes and regulatory action. Loss of heating is the same in the opposite season.

Emergency power requirements for certified facilities are prescriptive: generators must be maintained, tested and fueled, and the required emergency preparedness program has to address power loss. A generator that fails to start during an outage is simultaneously a property loss, a regulatory finding and, if a resident is harmed, a liability claim.

Refrigerated medication and vaccine loss is a smaller but frequent version of the same event, and it is usually a specific coverage extension worth confirming.

That the emergency generator is scheduled and not excluded as a portable or temporary unit. The limit for the business income and extra expense portion, since relocating residents or renting temporary chillers is expensive and fast. The spoilage extension for refrigerated medication. The service interruption extension, which covers loss from a utility failure off your premises, and the waiting period attached to it.

And whether the coverage sits on the property policy as an endorsement or as a separate policy, because two policies mean two adjusters and an argument about which one caused what.

Documented generator testing on the required schedule, under load, with the results logged and the failures acted on. Fuel supply contracts with a priority provision, because in a regional outage everyone calls the same supplier. Preventive maintenance records for chillers and boilers. And a written emergency plan for loss of heating or cooling that names where residents go and who decides.

Those records serve three purposes at once: they reduce the loss, they satisfy the surveyor, and they are what an underwriter asks for when pricing the equipment breakdown and property terms.