Q

Please provide an interpretation of the words “testing” or “tested” as it relates to the boiler and machinery policy exclusion, “an accident to any object while being tested.”

My situation deals with a piece of equipment which exploded during the start-up phase of the production process. Will the exclusion apply under these circumstances?

New York Subscriber

A

Absent a policy definition of “testing,” the common dictionary meaning applies. Webster's New Collegiate (10th edition) defines the term as “to put to test or proof: to undergo a test: to be assigned a standing or evaluation on the basis of tests…” The testing exclusion was included in boiler policies originally because such equipment is often subjected to higher than normal temperature, pressure and stress during testing.

We believe that the start-up phase of a piece of equipment is distinguishable from testing, and that the start-up phases of a piece of equipment is not “testing” that equipment. Any testing of the equipment that might be needed is surely something to be done before any and all other procedures leading to beginning production have been done. This interpretation is bolstered by the boiler and machinery policy's own terms, where the “covered cause of loss” (provision A.2.) is stated to be “an 'accident' to an 'object' shown in the Declarations. An 'object' must be in use or connected ready for use at the location specified…”

In the described scenario, the equipment was “connected ready for use,” and was not being “tested” for its capabilities. Given these facts, we believe the testing exclusion is inappropriately applied.