Does Builders Risk Cover Equipment Breakdown?

The NAIC glossary defines equipment-breakdown coverage separately, including direct damage to insured property from equipment failure. The ISO builders risk specimen excludes mechanical breakdown but includes a narrow testing provision with its own conditions. Ask whether breakdown means physical damage to machinery, consequential damage to surrounding project property, or both. Check the policy’s breakdown exclusion, testing exception, sublimit, waiting conditions, and any separate equipment breakdown form. Do not assume one covered component means all related equipment or resulting costs are covered. The NAIC describes equipment breakdown as a distinct coverage for damage from failure of boilers, machinery, and electrical equipment. Ask whether a separate equipment breakdown policy begins after the building is accepted, since the builders risk testing extension may be limited to a construction phase. Check covered equipment, operating conditions, temporary repairs, expediting costs, and any exclusions for wear or defective work.