Q

A company we insure was hired to remove the top of a water tower with a crane. The top was within the crane's load capacity. However, the top became stuck as it was being removed. The extra resistance caused the boom to buckle, causing about $40,000 damage to the crane.

The insurance company is denying this claim because of the mechanical breakdown exclusion on the inland marine policy covering the crane. This exclusion states that the inland marine policy will not pay for losses caused by: “Mechanical breakdown or derangement, rupture, bursting or disintegration of the rotating or moving parts of machines resulting from centrifugal or reciprocating force; however, we will pay for physical damage to any other covered property resulting from these occurrences.”

We think this claim should be covered. What's your opinion?

North Dakota Subscriber

A

The mechanical breakdown exclusion does not apply to the situation you described, so, barring other factors, the claim should be covered.

The boom was damaged because the load became stuck. Neither rotating or moving parts, nor centrifugal or reciprocal force, was involved. The mechanical breakdown exclusion does not apply here.

Even if, for example, the crane's engine overheated and caused the crane to jerk, the damage to the boom likely would be covered. In such an instance, the breakdown of the engine might not be covered, but the resulting damage to the boom would be covered.