A guide on how to handle the case of equipment recovery vs. replacement.
Is an equipment manufacturer and supplier considering voiding an equipment warranty or service contract?
From an insurance company perspective, there may not be an obligation to address warranty reinstatement based on policy language, although insurance professionals strive to make their policyholders whole to include the remaining warranty that existed at the time of the loss.
Here's what to consider and how to bring in the manufacturer?
The best route is a constructive and educational dialogue between the equipment supplier and the recovery expert on the technical and scientific validity of equipment recovery. The manufacturer does not participate in post-loss recovery activities on a regular basis, and as such, needs knowledge on these activities to gain confidence in the process. Action items to move the process forward:
● Ask the manufacturer to quantify the specific damage they observed. This can then be compared to what the equipment specialists noted as a starting point. You might have to pay for an evaluation.
● The equipment recovery specialist should harvest conductivity samples to determine the likelihood of equipment failure as a result of electrical short circuiting. This is especially important if the equipment will be powered on before removal of the contaminants.
● The equipment recovery specialist should also swab contamination and send the samples to a lab. The lab results will provide more scientific detail about areas within the facility that may be deteriorating faster than others, based on the composition of the analyzed matter.
● Obtain from the manufacturer the original cleanliness specification that the equipment met when it was first manufactured. Most manufacturers are not sure where to find this specification, as it is a quality assurance metric versus an equipment functionality question.
● Educate the manufacturer about the IPC standard, which is the premier standard that printed circuit board industry abides by. Advise that equipment will meet the IPC cleanliness threshold post-decontamination. This means that loss-related contaminants will not rust metal or cause electrical short circuits between electronic components.
● Offer to pay the manufacturer to witness the decontamination. The manufacturer’s representative can participate in the process.
● Consider paying for a service agreement that would commence once the warranty lapses, as an economical way to ensure one additional year of repair support. Such a contract may be available through the manufacturer or a third-party.
● Advise all stakeholders that there are third-party service providers that are eager to help with the recovery and place their own service contract on the equipment.
Sometimes the warranty cancellation may happen after the equipment has been decontaminated, repaired, and put back into use; at this point your best option is to have the manufacturer do an inspection and demonstrate that the item has been restored to a pre-loss condition.