Equipment Breakdown Coverage

What is equipment breakdown coverage?

Equipment breakdown insurance, also known as boiler and machinery insurance coverage, helps pay for sudden and accidental damage to your business's mechanical, electrical, or computer systems. This protection is key to reducing your downtime and minimizing the financial impact of equipment failures.

You can get equipment breakdown coverage on a business owners policy (BOP).

What does equipment breakdown cover?

Equipment breakdown insurance protects you from a wide range of equipment malfunctions and failures, including those caused by power surges or operator error. It pays to repair and replace equipment and typically covers:

• Off-premises accidents: Includes equipment breakdowns that occur off-site, whether temporarily on someone else's property or in transit.
• Spoilage damage: Protects perishable goods in case of equipment failure, power outage, or contamination.
• Expediting expenses: Covers additional costs incurred for rush repairs or equipment replacement.
• Business interruption: If the damage to covered machinery, equipment, or systems impacts your business, equipment breakdown coverage can help with expenses and lost revenue caused by the disruption. Learn more about business interruption insurance.

How equipment breakdown coverage works

Equipment breakdown coverage works by paying to fix or replace covered items when they stop working. To ensure accurate protection, list all of the machinery your company uses. You can customize your policy by choosing limits that match the value of your equipment.

It's also helpful to maintain detailed records, including purchase receipts, maintenance logs, and specifications. This documentation can help support you in a machinery breakdown insurance claim.

Equipment breakdown coverage examples

Equipment breakdown coverage protects the systems your business relies on. Examples include:

• HVAC and refrigeration: If these systems are damaged or malfunction, equipment breakdown insurance can help get them back up and running.
• Electrical: If things like transformers, electrical panels, circuit breakers, or cables break down because of power surges or overloaded circuits, equipment breakdown coverage can help restore them.
• Computer and communication: Breakdown coverage includes computer hardware, phones, and safety systems, such as fire or security alarms.
• Appliances and business machinery: Whether you own a restaurant with commercial ovens or a dry cleaning business with clothing conveyors, equipment breakdown coverage can help repair or replace broken equipment.

What equipment breakdown insurance doesn’t cover

Equipment breakdown coverage typically excludes claims involving:

• Malfunctions: Mechanical malfunctions and defects would not be covered by your insurance.
• Software and cyber attacks: While equipment breakdown coverage protects computer hardware, it doesn’t cover software. It also doesn't include things like cyber attacks or data breaches. Cyber liability insurance covers these events.
• Wear and tear: This coverage doesn't apply to normal wear and tear or poor maintenance.

Do I need equipment breakdown coverage?

Businesses that rely on equipment, electronics, or other types of machinery benefit from having equipment breakdown coverage. While it isn't typically required by law, it can protect against financial losses related to unexpected equipment failure. It also helps restore your operations.

It's a good fit for manufacturing companies, food service businesses, data centers, property owners, and more.

Speak with one of our business insurance experts to determine the right amount of coverage for your needs. We'll help you get affordable, customized equipment breakdown insurance.