Which of the following is NOT correct regarding the Defense Conditions under the Equipment Breakdown Coverage policy?

The assertion that defense costs are included in the policy limits is not correct. Under Equipment Breakdown Coverage policies, defense costs are typically treated separately from the policy limits, meaning they do not consume the insured's coverage limit for other claims. This is significant because it ensures that the insured has access to full policy benefits for potential damages while also receiving coverage for the defense against claims.

The obligations of insurers to defend their insured are well-established within the structure of liability coverage, as are the facts that defense costs are generally not subject to deductibles and that these costs do not reduce the available policy limits. Understanding the distinction between defense costs and the policy limit allocation is crucial for insured parties to ensure they have adequate coverage when faced with claims related to equipment breakdowns.