Equipment Breakdown Insurance
Protection when your critical machinery and systems fail unexpectedly.
Equipment breakdown insurance can cover the sudden failure of the machines, electrical systems, and computers your business runs on. It pays to repair or replace the equipment and covers the losses a breakdown causes, like lost income, food or stock that goes bad, and extra running costs.
Your business depends on working equipment to run and make money. A sudden breakdown, whether it is a machine, an electrical system, or your technology, can stop production, spoil your stock, and set off losses that regular property insurance does not cover. Equipment breakdown insurance is the modern version of what used to be called boiler and machinery insurance. Despite that old name, it covers far more than boilers, paying to repair or replace a wide range of equipment and covering the fallout that follows.
Who Should Consider Equipment Breakdown Insurance?
Any business that relies on machines, electrical systems, or computers to get through the day is exposed to breakdowns. The more your business runs on technology, the more you need it.
- Restaurants and food businesses that rely on refrigeration and cooking equipment
- Manufacturing and production facilities with specialized machinery
- Office buildings that depend on heating and cooling, elevators, and electrical systems
- Retailers with checkout and security systems
- Any business with valuable technology or computer equipment
What can be covered?
Repair or Replace the Equipment
Can pay to fix or replace equipment that suddenly breaks down.
Spoiled Food & Stock
Can cover food, products, and other perishable items that go bad because of a covered breakdown.
Utility Outages
Can cover losses when a breakdown at your power, water, or communications provider knocks out your service.
Extra Running Costs
Can cover added costs to keep going, like renting equipment or paying overtime.
Getting Your Data Back
Can pay to recover and restore data lost or damaged as a direct result of a covered breakdown.
Coverages shown are general examples, not a description of any specific policy. Policy coverages widely vary and should be confirmed with your broker.
Damage That Starts Inside the Equipment
Electrical systems like transformers and panels are easy to overlook in a maintenance plan, yet a single power surge or short circuit can knock out several systems at once, and a rooftop heating and cooling unit can fail and need a crane to replace. Equipment breakdown insurance is built for exactly these failures that start inside the equipment, covering the machines, electrical systems, and electronics a business runs on. It works alongside commercial property insurance, which handles outside events like fire, storm, and theft rather than a breakdown that starts within the equipment itself.
How Pricing Works
What drives your premium
- The equipment you are insuringThe type and replacement value of the machinery, electrical systems, heating and refrigeration, and computer equipment your business runs on. Specialized production machinery costs more to insure than standard office systems.
- Age and maintenanceOlder equipment breaks down more often, and a documented maintenance program, service records, and regular inspections of boilers and pressure vessels all improve your price.
- What a breakdown would actually cost youIt is not just the repair. A restaurant that would lose a walk-in freezer full of stock, or a plant that stops earning the moment a line goes down, is insuring far more than the machine itself.
- The lost-income and spoilage limits you chooseThese are the parts most likely to be underinsured. Setting a limit that reflects a realistic outage, not a best case, is what makes the coverage work, and it is what you are paying for.
- The waiting period and deductibleLost income and spoilage usually only start paying after a short waiting period, so a very brief outage may not be covered. A longer wait and a higher deductible both lower the premium.
- How much of your business runs on one systemA single rooftop heating and cooling unit, one transformer, or one production line means one failure stops everything, which is priced differently than equipment you have backup for.
- Claims history and how it is packagedPast breakdown claims raise the price. This coverage is usually added to your property or bundled business policy rather than bought on its own, which generally makes it cheaper than a standalone policy.
Frequently asked questions.
What does equipment breakdown insurance cover?
It covers the sudden failure of equipment your business depends on, such as electrical systems, heating and cooling, refrigeration, production machinery, and computers, and pays to repair or replace it. It also covers the losses that follow: income lost while you are down, spoiled stock, getting your data back, and the extra costs of keeping the business running.
Is equipment breakdown the same as boiler and machinery insurance?
Essentially yes. Equipment breakdown is the modern name for what the industry used to call boiler and machinery insurance. The name changed because the coverage grew well past boilers long ago to include electrical, machine, and computer equipment, and today's equipment breakdown policies are usually a little broader than the old boiler and machinery version.
How is this different from commercial property insurance?
Property insurance covers damage from outside events like fire, storm, and theft. Equipment breakdown covers damage that starts inside the equipment, like a power surge, a short circuit, or a motor failure. Those internal breakdowns are specifically left out of most property policies, which is the exact gap this coverage fills.
What kinds of equipment does it apply to?
A wide range. It covers machines like motors, pumps, and elevators; electrical equipment like panels and transformers; heating and refrigeration, including boilers and pressure tanks; and computer, phone, and security systems. Almost any business that runs on machines, electrical systems, or technology has breakdown risk, from restaurants and offices to factories.
Does it cover breakdowns caused by age or wear and tear?
No. Equipment breakdown responds to a sudden failure, not gradual wear and tear, rust, or aging over time, and not damage from outside events like fire or flood, which fall under property insurance. It is coverage for an unexpected breakdown, not a replacement for maintenance or a service contract.
Does it cover spoiled food or lost stock from a breakdown?
Yes. If a fridge or freezer breaks down and spoils your stock, equipment breakdown coverage can pay for the lost food and goods, which is often a make-or-break coverage for restaurants, grocers, and food producers. It can also cover income you lose while you cannot operate until the equipment is fixed.
Do I buy it as its own policy?
Usually it is added to your commercial property or bundled business policy rather than bought on its own, which keeps your property and breakdown coverage working together. The lost-income and spoilage parts often kick in after a short waiting period, so a very brief outage may not be paid. We will confirm how it is set up for your business.
Protect Your Critical Equipment
Our team is ready to find the right coverage at the right price. Get a tailored quote today.