In the days before electronics, relays and contactors were used to switch circuits on and off. Many were needed to represent a control system.

A closed relay contact represented an “on” condition and an open relay contact represented an “off” condition. By connecting many together, a complete control system could be created.

Older relay controls systems were powered by a sizable power source that had the ability to cause wires or other components to arc, burn or melt. Failures usually resulted in arcing, burning, discoloration, smell, or unusual noise such as humming or chattering.

It’s no wonder that the equipment breakdown insurance industry would require signs of physical damage as evidence to confirm an electrical loss.

Today, electronic devices have replaced almost all relays used for control systems. A transistor is used as an electronic switch instead of a relay contact. One can be turned on and off just the same. The transistor has replaced the relay contact but the control logic hasn’t changed.

Today, transistors are built into integrated circuits and microcomputer chips in very large quantities. Since 1971, the number of individual transistors built onto a chip has doubled every two years.

This doubling phenomenon is called Moore’s Law. The largest commercially available processor chip in 2016 had 7.2 billion transistors.

How does all of this affect the equipment breakdown insurance industry? With many low-power transistors on a single chip, is it still reasonable to expect to see damage such as burning when parts fail?

Electronic components are very vulnerable to high-voltage transients that can instantly damage transistors on a microchip without any signs of arcing or burning.

The first sign of a failure may be when the equipment does not perform as originally designed. There are typically no other visible signs of damage. The best way to describe this electronic failure mode is to call it electronic circuitry impairment.

With electronic circuitry impairment, the equipment suddenly fails to perform as expected. No physical signs of damage are evident to any of the circuitry. Repairing the system may involve replacing components until it works normally.

The components may include circuit boards, integrated circuits, computer microchips and disk drives. When a new and a defective board are closely compared, they may “look” identical.

Many systems have all of the necessary components on a single circuit board, but these boards are not meant to be repaired. If a single transistor fails on a microchip, the entire board may need to be replaced.

Almost all equipment today uses electronic components that fail with no outward signs. This is the nature of an electronic circuitry impairment loss. Repairs are achieved by simply replacing electronic parts.

Make sure that your equipment breakdown coverage has kept pace with the realities of how electronic equipment fails today. Click here for information on equipment breakdown solutions for today’s equipment risks.

 

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