Lab Instrument Service Contracts: What You Need to Know

When selecting laboratory equipment for your lab, it is important to purchase quality equipment that comes with a 1-year parts and labor warranty.  The warranty will cover any unit failures that occur as long as they are not deemed to be the result of end user error.  But, what do you do in year two?  Most companies have the option to purchase an extended warranty or service contract to cover repairs for year two and some even have multi-year contracts.  These service contracts can be pricey.  So, should you purchase a service contract on your lab instrument?

Here are 5 important factors to consider:

1. Does the service contract include parts and labor?
2. Are there any parts to the lab equipment that are not covered by the extended warranty?
3. Does the service contract include on-site repair, and is the travel cost included in the service contract or is it additional?  
4. Is the contract for depot service only, and if so, are the shipping costs included in the service contract or is shipping costs your responsibility?
5. Does the service contract/extended warranty include an annual preventative maintenance on the laboratory instrument or is it additional?

Lab instrument service contracts are not all created equal.  Some contracts include service and labor, but you need to drill down on your particular contract to see what is exactly covered. Contracts can vary in the extent of their coverage.  Extended warranties/service contracts can exclude wearable parts on the laboratory equipment.  Other service contracts may only include a designated amount of hours and anything beyond that would be billable to you.  Some service contracts only include parts and no labor.  In this case, if you are going to be paying for labor, it is also important to see if your service contract designates who can perform the service because lab equipment service technicians can charge a wide range of hourly rates.  OEM (original equipment manufacturer) technicians usually charge higher hourly service rates versus a third party service technician; however, your extended warranty/service contract may prohibit you hiring a third party service technician to perform the repair on your lab instrument.  

Depending on the laboratory equipment that you have the service contract on will determine if the service for that lab instrument will be performed in the laboratory or will be required to be sent into a facility for depot service.  This is an important distinction to note in the service/extended warranty contract.  If the unit will be sent in for depot service, you will need to check to see who is responsible for the shipping to and from the facility performing the repair of the lab instrument. If the repair service will be performed on-site at your laboratory, you will want to check to see if the laboratory service technician’s travel time will be an additional charge and at what rate.  

Another consideration with service contracts or extended warranties is to see if there is preventative maintenance included in the contract price.  If there is no PM included, this will be an additional cost. Preventative maintenance should not be skipped just because there is a service contract in place on the lab equipment.  PM’s are vital to keeping your lab instruments performing at their best and can decrease downtime by as much as 60%.   

The ultimate question comes down to is a service contract or extended warranty worth it with regard to your lab instrumentation?  On some lab equipment that are complex and have known issues, a service contract can yield a positive ROI; however, there are less complicated pieces of laboratory equipment that a service contract may not be necessary, especially if daily routine maintenance is conducted by the lab technician.  The better maintained a piece of equipment is, the less likely for the laboratory equipment to have issues.  A service contract or extended warranty is like taking out an insurance policy on your lab instrumentation. Ultimately each lab has to make the decision on what will work best for them.   Remember to read the fine print of your service contract and know what is and is not covered so that you do not have any surprises. 

About MES

Since 2002, Medical Equipment Source has been providing laboratory equipment services to private practices and independent laboratories across the country and the world, empowering them to run more efficiently while providing better patient outcomes.

From laboratory setups to lap equipment maintenance to consulting contracts, Medical Equipment Source provides a comprehensive range of solutions to physicians and practice managers looking to grow their business by offering their own in-house lab services. Medical Equipment Source provides help with lab and exam room furnishings, consumables, repair services, lab equipment and layout, and more.

Today, Medical Equipment Source is an authority in the physician-owned lab market, with clients in 49 states and 30 countries. Those clients range from physicians who have launched their own labs to lab technicians who have built their own spaces as well as hospitals, universities and reference laboratories