Water Loss to Boiler

I have a businessowners policy covering a building I own. A pipe broke in the building, and the water from it destroyed an unused boiler in the basement. The boiler was not connected, but was kept operational to help defray the expense of the roof-mounted heat pumps during the winter months. I do not see anything in the policy that excludes coverage, and neither does the adjuster, but she refuses to pay for the boiler, although other damage was paid for.

What is your thought? I am enclosing a copy of the declarations page.

Massachusetts Subscriber

From the declarations page you sent, it appears that the insurer is mistakenly applying exclusions that properly belong to events occurring from within the boiler. For example, the ISO BOP will not pay for “loss of or damage to steam boilers…caused by or resulting from any condition or event inside such equipment” unless the result of an explosion of gases or fuel within the furnace of a fired vessel or the flues or passages through which the gasses pass. When coverage for boilers is purchased, then other conditions or events are covered. The copy of the “energy equipment declarations” which you included, though, excludes boilers, so loss other than from explosion of gases is not covered. Your policy would not respond to the boiler's depletion or bursting, for example.

But in your situation, an event from outside the boiler—the pipe bursting—was the cause of loss. The boiler is covered property by definition (permanently installed equipment). So, unless the insurer can point to a specific exclusion of coverage for externally-caused damage, the loss is covered.