What Is Equipment Breakdown Insurance?

Equipment-breakdown coverage can help repair covered machinery or building equipment after a mechanical or electrical failure. It fits businesses that depend on equipment to operate; check whether lost income, spoilage and utility failures are included.

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What Does Equipment Breakdown Insurance Cover?

A failed refrigeration unit, electrical panel or production machine can leave you facing a repair bill and a business interruption. ^3,²

Equipment breakdown coverage can help your business recover from covered mechanical or electrical failures affecting its equipment. ^1,²

Equipment That Keeps the Business Running

Check your heating and cooling, refrigeration, electrical, communications and production equipment when deciding what the quote should include. ^3,² Do not assume your property limit covers equipment failure. Compare the property causes of loss with the separate breakdown protection in the quote. ²

Who Needs Equipment Breakdown Insurance?

Consider this if a failed machine or building system would disrupt your business, whether that's a production line, refrigeration or office equipment. ⁵ ⁵

Equipment Breakdown Insurance Coverage Examples

What happened

Your Refrigeration System Fails

A refrigeration system breaks down, putting your stock at risk of spoilage.

How coverage may help

Equipment breakdown may pay for repairs to the system. Spoilage protection must also be included if you want coverage for the stock, and may have its own limit or waiting period. ^1,^2,⁴

What happened

A Machine Takes Weeks to Repair

A production machine breaks, and the replacement part won't arrive for several weeks.

How coverage may help

The repair bill is only part of the loss. Included interruption or extra-expense coverage may help with lost income or temporary operating costs, subject to its limits and deductible. ^1,^2,⁴

What Losses Should the Quote Address?

Repair Costs and Downtime

A broken production machine can leave you paying for repairs, renting a replacement and losing sales while output is reduced. Equipment damage, extra expenses and lost income need the relevant protection and limits. A quote covering the machine's value alone may not address the rest of the loss. ⁴

Repairing equipment and replacing income during downtime address different losses. Discuss both if a failed machine would stop your operations. ^2,⁵

Spoilage and Utility Dependence

Ask whether spoilage and utility interruptions are included, with what triggers, limits and waiting periods. ⁴

How Do You Compare Equipment Breakdown Insurance Coverage and Costs?

Breakdown, Wear and Maintenance

Ask what counts as a breakdown and how the policy treats wear, deterioration and maintenance-related conditions. ⁴

Limits, Valuation and Location

Compare each limit and deductible, including any time-based deductible for interruption losses. ⁴ Ask how repair versus replacement costs are valued and what spending or replacement conditions apply. ⁴ Check who owns the equipment, which locations are scheduled and whether equipment used away from your premises is addressed. ⁴

Provision	Ask the insurer
Equipment damage	How are repair and replacement costs valued, and what spending conditions apply?
Interruption losses	What limit and time-based deductible apply to downtime losses?
Ownership	How does the quote treat equipment your business owns or uses?
Locations	Which premises and off-premises uses does the quote cover?
Spoilage and utilities	Which events trigger this protection, and what limits and waiting periods apply?

⁴ ⁴ ⁴ ⁴

Equipment That Travels

For tools or machinery that travel between jobs, compare inland-marine protection with the breakdown terms; location and cause of damage are separate questions. ²

What Do You Need for Equipment Breakdown Insurance Quotes?

Inventory and Recovery Options

Prepare an equipment inventory by location, highlighting high-value machines, critical systems and items that would be hard to repair or replace. ⁵ Describe maintenance history, spare parts, backup equipment, repair lead times and ways you could keep operations running. ⁵

Prepare	Ask the broker
Equipment and location	Which machines and systems will the proposal cover?
Critical or hard-to-replace items	How would losing each item affect your operations?
Maintenance history and spare parts	What details about equipment condition and repairs does the insurer need?
Backups, rentals and repair lead times	How can you keep operating while equipment is repaired?

⁵ ⁵

Stock and Essential Services

Identify stock vulnerable to spoilage and the utility services your operation depends on, so those losses enter the quote discussion. ⁵

Equipment Breakdown Insurance: Key Terms in Plain English

Covered Breakdown

The type of mechanical or electrical failure the policy addresses. Wear and maintenance-related conditions need a separate check. ^1,² ⁴

Time-Based Deductible

A deductible measured in time for an interruption loss, rather than a fixed dollar amount. ⁴

Frequently Asked Questions About Equipment Breakdown Insurance

Is Breakdown Coverage the Same as Property Insurance?

No. A property limit doesn't establish protection for mechanical or electrical failure. The breakdown terms need to cover the cause of damage. ²

Does It Cover Wear and Routine Maintenance?

Don't treat it as a maintenance contract. The policy defines a covered breakdown and how it treats wear, deterioration and maintenance-related conditions. ⁴

Is Equipment Breakdown Insurance Only for Factories?

No. Consider heating and cooling systems, refrigeration, electrical equipment and communications systems as well as production machinery. Check which of your equipment the proposed policy covers. ^3,²

Can Equipment Breakdown Insurance Help With Lost Income?

It can if the relevant income protection is included. Review repair costs, lost income and extra operating expenses separately, because each needs the appropriate coverage and limits. ⁴

Which Insurance Providers Offer Equipment Breakdown Insurance?

AIG
AIG Programs lists equipment breakdown in named program schedules including the manufactured-housing program; schedule-specific membership only.
Alliance Risk
Alliance Risk arranges equipment breakdown insurance.
Chubb
Chubb offers equipment breakdown insurance.
CNA
Coverdash
Coverdash lists equipment breakdown in its quote catalog.
Gallagher
Gallagher arranges boiler and machinery coverage through its property practice.
HUB International
HUB International arranges equipment breakdown insurance.
Liberty Mutual
A group brand spanning personal and commercial insurance businesses; its business unit pages describe small-commercial cover for small businesses and commercial, specialty, surety, and reinsurance solutions for mid-size and large businesses.
Markel Insurance
Equipment-breakdown option within property coverage; standalone product not established
Marsh
Marsh arranges equipment breakdown insurance, including for data centers.
Nationwide
Nationwide presents equipment breakdown under its BOP coverages; the individual policy controls inclusion and terms.
Newfront
Newfront offers equipment breakdown solutions through its property practice.
The Baldwin Group
Listed as machinery/equipment breakdown for digital-infrastructure and transportation exposures.
THREE by Berkshire Hathaway
THREE lists equipment breakdown within the package; its displayed sample excludes machinery, equipment or listed vehicles that stop without an accident. Check the quoted form for the actual protection.
Travelers
Travelers offers equipment breakdown insurance.