Irrigation System and Steam Boiler Policy

We have an insured with a company-specific steam boiler policy. The insured has coverage for direct damage to covered property and expediting expense. Center pivot irrigation systems were insured on the policy because the standard property policy excluded mechanical or electrical breakdown. The systems are valued and insured for $80,000 each.

The systems are around 1,500 feet long. There are 100 foot long spans of irrigation pipe supported by wheeled motorized supports that drive the irrigation piping in a circle around the field. The system is anchored at one end where it is hooked to the water pump and electric motor that supplies power to the wheeled motorized supports. Each of the motors has a computerized switch to make it go the correct speed and direction.

Our insured's computerized switch (the reverse mechanism) malfunctioned and ran the wrong direction, causing the system to slam into a tree. The system suffered significant damage.

The adjuster stated that there was an accident to covered equipment (the switch) but that the pivot span was not “covered equipment” under the policy because it was a structure. The insurer denied coverage.

We believe that a piece of equipment anchored on one end moving across a field is not a structure according to the definition of “structure.” What do you think?

Mississippi Subscriber

The loss should be covered under the carrier's equipment breakdown policy. The form provides coverage for an “accident” to “covered equipment.” While the adjuster claimed that the pivot span was not “covered equipment” because it is a structure, we do not agree that movable piping, which delivers water to a field, is a structure. “Structure” is not a defined term on the policy, but The Random House Dictionary of the English Language defines it as “something built, or constructed, as a building, bridge, dam, etc.”

However, even if the pivot span were a structure, the policy also insures “covered property” that is damaged by an accident to covered equipment. “Covered property” is defined as property the named insured owns or is in control of that is situated at a location described in the declarations. Accordingly, the pivot span is covered property.

The purpose of such coverage forms is not only to insure damage to covered equipment but also to covered property that results from an accident, which would include the pivot span.