---
title: "What Is Equipment Breakdown Insurance?"
description: "Equipment breakdown insurance can help pay for damage from covered electrical or mechanical failures in the systems your business relies on."
canonical: "https://spot.insure/coverage/equipment-breakdown"
page-type: "coverage-article"
updated-at: "2026-09-16"
verified-at: "2026-09-16"
---

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[Human-readable page](https://spot.insure/coverage/equipment-breakdown)

# What Is Equipment Breakdown Insurance?

Equipment breakdown insurance can help pay for damage from covered electrical or mechanical failures in the systems your business relies on.

## Summary

Equipment breakdown insurance addresses damage from covered mechanical or electrical failures affecting business equipment. [1](https://www.iii.org/article/understanding-commercial-package-policies) [2](https://www.insurance.ca.gov/01-consumers/105-type/95-guides/09-comm/commercialguide.cfm)

## What Does Equipment Breakdown Insurance Cover?

Equipment breakdown insurance addresses damage from covered mechanical or electrical failures affecting business equipment. [1](https://www.iii.org/article/understanding-commercial-package-policies) [2](https://www.insurance.ca.gov/01-consumers/105-type/95-guides/09-comm/commercialguide.cfm)

### Equipment That Keeps the Business Running

Consider heating and cooling systems, refrigeration, electrical equipment and communications systems, as well as production machinery. [3](https://www.travelers.com/risk-control/specialties/equipment-breakdown) [2](https://www.insurance.ca.gov/01-consumers/105-type/95-guides/09-comm/commercialguide.cfm)

A property limit does not establish coverage for equipment failure. Compare the property causes of loss with the breakdown protection being offered. [2](https://www.insurance.ca.gov/01-consumers/105-type/95-guides/09-comm/commercialguide.cfm)

## 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](https://asset.trvstatic.com/download/assets/contingency-planning-key-equip-917-bre.pdf/43eed442df1311ef840216de057e6aef) [5](https://asset.trvstatic.com/download/assets/contingency-planning-key-equip-917-bre.pdf/43eed442df1311ef840216de057e6aef)

## Coverage Examples

These are examples, not coverage guarantees. Your policy terms and the facts of the claim determine what is covered.

### Your Refrigeration System Fails

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

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](https://www.iii.org/article/understanding-commercial-package-policies) [2](https://www.insurance.ca.gov/01-consumers/105-type/95-guides/09-comm/commercialguide.cfm) [4](https://www.munichre.com/content/dam/munichre/hsb/hsb-iic/documents/hsb-techadvantage-equipment-breakdown-coverage-form.pdf/_jcr_content/renditions/original./hsb-techadvantage-equipment-breakdown-coverage-form.pdf) [4](https://www.munichre.com/content/dam/munichre/hsb/hsb-iic/documents/hsb-techadvantage-equipment-breakdown-coverage-form.pdf/_jcr_content/renditions/original./hsb-techadvantage-equipment-breakdown-coverage-form.pdf)

### A Machine Takes Weeks to Repair

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

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](https://www.iii.org/article/understanding-commercial-package-policies) [2](https://www.insurance.ca.gov/01-consumers/105-type/95-guides/09-comm/commercialguide.cfm) [4](https://www.munichre.com/content/dam/munichre/hsb/hsb-iic/documents/hsb-techadvantage-equipment-breakdown-coverage-form.pdf/_jcr_content/renditions/original./hsb-techadvantage-equipment-breakdown-coverage-form.pdf) [4](https://www.munichre.com/content/dam/munichre/hsb/hsb-iic/documents/hsb-techadvantage-equipment-breakdown-coverage-form.pdf/_jcr_content/renditions/original./hsb-techadvantage-equipment-breakdown-coverage-form.pdf)

## 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](https://www.munichre.com/content/dam/munichre/hsb/hsb-iic/documents/hsb-techadvantage-equipment-breakdown-coverage-form.pdf/_jcr_content/renditions/original./hsb-techadvantage-equipment-breakdown-coverage-form.pdf)

Repairing equipment and replacing income during downtime address different losses. Discuss both if a failed machine would stop your operations. [2](https://www.insurance.ca.gov/01-consumers/105-type/95-guides/09-comm/commercialguide.cfm) [5](https://asset.trvstatic.com/download/assets/contingency-planning-key-equip-917-bre.pdf/43eed442df1311ef840216de057e6aef)

### Spoilage and Utility Dependence

Ask whether spoilage and utility interruptions are included, with what triggers, limits and waiting periods. [4](https://www.munichre.com/content/dam/munichre/hsb/hsb-iic/documents/hsb-techadvantage-equipment-breakdown-coverage-form.pdf/_jcr_content/renditions/original./hsb-techadvantage-equipment-breakdown-coverage-form.pdf)

## How Do You Compare 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](https://www.munichre.com/content/dam/munichre/hsb/hsb-iic/documents/hsb-techadvantage-equipment-breakdown-coverage-form.pdf/_jcr_content/renditions/original./hsb-techadvantage-equipment-breakdown-coverage-form.pdf)

### Limits, Valuation and Location

Compare each limit and deductible, including any time-based deductible for interruption losses. [4](https://www.munichre.com/content/dam/munichre/hsb/hsb-iic/documents/hsb-techadvantage-equipment-breakdown-coverage-form.pdf/_jcr_content/renditions/original./hsb-techadvantage-equipment-breakdown-coverage-form.pdf)

Ask how repair versus replacement costs are valued and what spending or replacement conditions apply. [4](https://www.munichre.com/content/dam/munichre/hsb/hsb-iic/documents/hsb-techadvantage-equipment-breakdown-coverage-form.pdf/_jcr_content/renditions/original./hsb-techadvantage-equipment-breakdown-coverage-form.pdf)

Check equipment ownership, scheduled locations and treatment of equipment used away from your premises. [4](https://www.munichre.com/content/dam/munichre/hsb/hsb-iic/documents/hsb-techadvantage-equipment-breakdown-coverage-form.pdf/_jcr_content/renditions/original./hsb-techadvantage-equipment-breakdown-coverage-form.pdf)

| Provision | What to compare |
| --- | --- |
| Equipment damage | The repair or replacement valuation and any spending conditions |
| Interruption losses | The relevant limit and any time-based deductible |
| Ownership | How the quote treats the equipment the business owns or uses |
| Locations | Which premises are addressed and how off-premises use is treated |
| Spoilage and utilities | Selected protection, triggering events, limits and waiting periods |

[4](https://www.munichre.com/content/dam/munichre/hsb/hsb-iic/documents/hsb-techadvantage-equipment-breakdown-coverage-form.pdf/_jcr_content/renditions/original./hsb-techadvantage-equipment-breakdown-coverage-form.pdf) [4](https://www.munichre.com/content/dam/munichre/hsb/hsb-iic/documents/hsb-techadvantage-equipment-breakdown-coverage-form.pdf/_jcr_content/renditions/original./hsb-techadvantage-equipment-breakdown-coverage-form.pdf) [4](https://www.munichre.com/content/dam/munichre/hsb/hsb-iic/documents/hsb-techadvantage-equipment-breakdown-coverage-form.pdf/_jcr_content/renditions/original./hsb-techadvantage-equipment-breakdown-coverage-form.pdf) [4](https://www.munichre.com/content/dam/munichre/hsb/hsb-iic/documents/hsb-techadvantage-equipment-breakdown-coverage-form.pdf/_jcr_content/renditions/original./hsb-techadvantage-equipment-breakdown-coverage-form.pdf)

### 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](https://www.insurance.ca.gov/01-consumers/105-type/95-guides/09-comm/commercialguide.cfm)

## What Do You Need for a Quote?

### Inventory and Recovery Options

Prepare an equipment inventory by location, identifying high-value machines, critical systems and items that would be hard to repair or replace. [5](https://asset.trvstatic.com/download/assets/contingency-planning-key-equip-917-bre.pdf/43eed442df1311ef840216de057e6aef)

Be ready to discuss maintenance history, spare parts, backup equipment, repair lead times and options for keeping operations running. [5](https://asset.trvstatic.com/download/assets/contingency-planning-key-equip-917-bre.pdf/43eed442df1311ef840216de057e6aef)

| Information to organize | Why bring it to the discussion? |
| --- | --- |
| Equipment and location | Identify the machines and systems the proposal should address |
| Critical or hard-to-replace items | Discuss the effect of losing access to them |
| Maintenance history and spare parts | Explain the equipment’s condition and recovery options |
| Backups, rentals and repair lead times | Discuss ways to keep operating during repairs |

[5](https://asset.trvstatic.com/download/assets/contingency-planning-key-equip-917-bre.pdf/43eed442df1311ef840216de057e6aef) [5](https://asset.trvstatic.com/download/assets/contingency-planning-key-equip-917-bre.pdf/43eed442df1311ef840216de057e6aef)

### 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](https://asset.trvstatic.com/download/assets/contingency-planning-key-equip-917-bre.pdf/43eed442df1311ef840216de057e6aef)

## 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](https://www.iii.org/article/understanding-commercial-package-policies) [2](https://www.insurance.ca.gov/01-consumers/105-type/95-guides/09-comm/commercialguide.cfm) [4](https://www.munichre.com/content/dam/munichre/hsb/hsb-iic/documents/hsb-techadvantage-equipment-breakdown-coverage-form.pdf/_jcr_content/renditions/original./hsb-techadvantage-equipment-breakdown-coverage-form.pdf)

### Time-Based Deductible

A deductible measured in time for an interruption loss, rather than a fixed dollar amount. [4](https://www.munichre.com/content/dam/munichre/hsb/hsb-iic/documents/hsb-techadvantage-equipment-breakdown-coverage-form.pdf/_jcr_content/renditions/original./hsb-techadvantage-equipment-breakdown-coverage-form.pdf)

## Frequently Asked Questions

### 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](https://www.insurance.ca.gov/01-consumers/105-type/95-guides/09-comm/commercialguide.cfm)

### 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](https://www.munichre.com/content/dam/munichre/hsb/hsb-iic/documents/hsb-techadvantage-equipment-breakdown-coverage-form.pdf/_jcr_content/renditions/original./hsb-techadvantage-equipment-breakdown-coverage-form.pdf)

### 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](https://www.travelers.com/risk-control/specialties/equipment-breakdown) [2](https://www.insurance.ca.gov/01-consumers/105-type/95-guides/09-comm/commercialguide.cfm)

### 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](https://www.munichre.com/content/dam/munichre/hsb/hsb-iic/documents/hsb-techadvantage-equipment-breakdown-coverage-form.pdf/_jcr_content/renditions/original./hsb-techadvantage-equipment-breakdown-coverage-form.pdf)

## Related Coverage

- [What Is Commercial Property Insurance?](https://spot.insure/coverage/commercial-property) — Commercial property insurance addresses physical business assets, including buildings, equipment, furniture and inventory, subject to the policy’s covered property, causes and terms.
- [What Is Inland Marine Insurance?](https://spot.insure/coverage/inland-marine) — Inland marine is specialized property insurance for items such as equipment that travels between sites, property being installed and goods in transit. Coverage types differ, so match each quote to the items you own, rent or hold for others.

## Documented Providers

### [Alliance Risk](https://spot.insure/insurance-providers/alliance-risk)

Alliance Risk arranges equipment breakdown insurance. [6](https://joinalliancerisk.com/coverages/)

### [Chubb](https://spot.insure/insurance-providers/chubb)

Chubb offers equipment breakdown insurance. [7](https://www.chubb.com/us-en/business-insurance/equipment-breakdown.html) [8](https://www.chubb.com/us-en/business-insurance/software-system-developers.html)

### [Coverdash](https://spot.insure/insurance-providers/coverdash)

Coverdash lists equipment breakdown in its quote catalog. [9](https://www.coverdash.com/coverage)

### [Gallagher](https://spot.insure/insurance-providers/gallagher)

Gallagher arranges boiler and machinery coverage through its property practice. [10](https://www.ajg.com/insurance/property-insurance/)

### [HUB International](https://spot.insure/insurance-providers/hub-international)

HUB International arranges equipment breakdown insurance. [11](https://www.hubinternational.com/products/business-insurance/boiler-and-machinery-insurance/)

### [Marsh](https://spot.insure/insurance-providers/marsh)

Marsh arranges equipment breakdown insurance, including for data centers. [12](https://www.marsh.com/en/industries/technology/expertise/data-center-insurance-and-risk-management-services.html)

### [Newfront](https://spot.insure/insurance-providers/newfront)

Newfront offers equipment breakdown solutions through its property practice. [13](https://www.newfront.com/property-insurance)

### [Travelers](https://spot.insure/insurance-providers/travelers)

Travelers offers equipment breakdown insurance. [14](https://www.travelers.com/business-insurance/boiler-machinery/equipment-breakdown-coverage)

## Sources

1. [Understanding Commercial Package Policies](https://www.iii.org/article/understanding-commercial-package-policies). Insurance Information Institute; Available CPP additions: Equipment breakdown. Accessed 2026-09-16.
2. [Commercial Insurance Guide](https://www.insurance.ca.gov/01-consumers/105-type/95-guides/09-comm/commercialguide.cfm). California Department of Insurance; Boiler and Machinery; Commercial Property: Covered Causes of Loss; Commercial Property: Time Element; Inland Marine; Coverage Forms and/or Specialty Coverages. Accessed 2026-09-16.
3. [Equipment Breakdown](https://www.travelers.com/risk-control/specialties/equipment-breakdown). Travelers; Definition and equipment list. Accessed 2026-09-16.
4. [HSB TechAdvantage Equipment Breakdown Coverage Form](https://www.munichre.com/content/dam/munichre/hsb/hsb-iic/documents/hsb-techadvantage-equipment-breakdown-coverage-form.pdf/_jcr_content/renditions/original./hsb-techadvantage-equipment-breakdown-coverage-form.pdf). The Hartford Steam Boiler Inspection and Insurance Company; G.1 Accident, PDF p.17; A.2.a–c p.1; C.2 pp.8–9; C pp.8–9; D pp.9–10; E.10 Valuation, PDF pp.13–14; G.10–11 pp.18–19; A.2.n p.5 (Off Premises Equipment Breakdown); A.2.p pp.5–6; A.2.r p.6; G.18 p.20 (Interruption of Service). Accessed 2026-09-16.
5. [Contingency Planning for Equipment Failures](https://asset.trvstatic.com/download/assets/contingency-planning-key-equip-917-bre.pdf/43eed442df1311ef840216de057e6aef). The Travelers Indemnity Company; Identifying Key Equipment, PDF p.1; Contingency Planning, PDF pp.1–2; Spoilage; Emergency Backup Services, PDF p.3. Accessed 2026-09-16.
6. [Alliance Products](https://joinalliancerisk.com/coverages/). Alliance Risk; Coverages product cards, from Accountant Professional Liability through Wrap-Up Insurance. Accessed 2026-09-16.
7. [Equipment Breakdown Insurance](https://www.chubb.com/us-en/business-insurance/equipment-breakdown.html). Chubb; Monoline and package equipment-breakdown coverage; electronics among target clients. Accessed 2026-09-16.
8. [Insurance For Software Product & System Developers](https://www.chubb.com/us-en/business-insurance/software-system-developers.html). Chubb; Property & casualty and financial-lines coverage solutions lists for software and systems developers. Accessed 2026-09-16.
9. [Coverage Hub](https://www.coverdash.com/coverage). Coverdash; Core Business: General Liability, Business Owner’s Policy, Commercial Property, Workers’ Comp; Professional & Management: Professional Liability, Tech E&O, Lawyers Professional Liability, Directors & Officers, Employment Practices, Fiduciary, Management Liability, Media Liability; Cyber & Crime: Cyber Insurance, Crime Coverage, Kidnap & Ransom; Property & Catastrophe: Builder’s Risk, Equipment Breakdown, Inland Marine; Auto & Transport: Commercial Auto, Motor Truck Cargo, Non-Trucking Liability, Ocean Marine; Excess & Specialty: Umbrella, Excess Liability, Product Liability, Product Recall, Liquor Liability, Surety Bond; Get a quote links. Accessed 2026-09-16.
10. [Property Insurance](https://www.ajg.com/insurance/property-insurance/). Gallagher; Introduction on building property programs with underwriters; Our services include: Builder’s risk, Boiler and machinery; global reach; Appraisal services. Accessed 2026-09-16.
11. [Boiler and Machinery Equipment Insurance Coverage](https://www.hubinternational.com/products/business-insurance/boiler-and-machinery-insurance/). HUB International; Boiler & Machinery Insurance – Protect Your Equipment and Business: design and negotiation of a tailored equipment-breakdown program. Accessed 2026-09-16.
12. [Data center insurance and risk management](https://www.marsh.com/en/industries/technology/expertise/data-center-insurance-and-risk-management-services.html). Marsh; Managing data center risk; Closing the gaps in conventional coverage (property, casualty, technology E&O); Derisking power purchase agreement and interconnection obligations; FAQs: What does data center insurance typically cover? (property damage, equipment breakdown, business interruption, cyber, general liability). Accessed 2026-09-16.
13. [Property](https://www.newfront.com/property-insurance). Newfront; Opening equipment-breakdown service offer; Our Approach: Quality Matters and Global Placement Expertise; No Two Risks are Alike; Key Coverages to Protect Your Business: Cargo Stock Throughput; Talk to an Expert. Accessed 2026-09-16.
14. [Equipment Breakdown Insurance Coverage](https://www.travelers.com/business-insurance/boiler-machinery/equipment-breakdown-coverage). Travelers; EnergyMax 21 equipment-breakdown package, including high-tech businesses among stated audiences. Accessed 2026-09-16.

Updated 2026-09-16. Factually reviewed 2026-09-16. Spot, a product of Tools for Enlightenment, publishes this research and works in the commercial insurance market. [Editorial policy](https://spot.insure/editorial-policy). To suggest a correction, [contact Spot](https://spot.insure/contact) with the page URL and supporting source.

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