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What is equipment breakdown insurance

Artificially generated electrical currents;

Centrifugal force;

Boiler overheating, cracking, bulging, sagging;

Bulging, cracking or collapse of pressure vessels, such as water heaters, compressed air tanks, steam cookers and kettles, expansion tanks and condensate return tanks.

Equipment Breakdown insurance is among the broadest in the industry. Not only do we offer a broader range of coverage, we insure many types of equipment that many other companies exclude. Far from insuring just "boiler and machinery" we cover many kinds of equipment, including:

  • Boilers, pressure vessels, water heaters
  • Electrical distribution systems
  • Heating and cooling systems
  • Refrigeration (including lost refrigerant)
  • Production equipment
  • Office equipment
  • Computer technology
  • Computer controlled machines such as CNC machines and robotics
  • Communications systems, including phone and voice-mail systems
  • Security and fire detection systems
  • Ovens, stoves, furnaces
  • Elevators, escalators, cranes, hoists and lifts
  • Cash registers and inventory control systems
  • Diagnostic equipment
  • And more

Equipment Breakdown policies offer more than just insurance. We provide services to help you meet local inspection requirements and get back into business if you do experience a breakdown. These include:

  • Jurisdictional inspections of boilers and pressure vessels, required by virtually all states and municipalities, are a built-in benefit of Equipment Breakdown coverage. Some insurance companies don’t include this service, or they charge extra for it.
  • Loss prevention services designed to help business owners improve equipment operation and maintenance programs to prevent losses that can impair production or service capabilities.
  • Claim service to help you more swiftly restore business operations following a breakdown.



Equipment Breakdown Insurance works a lot like other types of commercial insurance. But when some people hear the old phrase "boiler and machinery" they think they have to be an engineer to understand it. Actually, it's pretty simple. These FAQs will be helpful if you're just getting started.

Equipment Breakdown Insurance pays for financial loss incurred when equipment breaks down suddenly and accidentally. Equipment is subject to unique hazards such as power surges, short circuits, centrifugal force, motor burnout, and mechanical breakdown. Equipment breakdown insurance covers equipment accidents from these risks of loss.

It pays the cost to repair or replace damaged equipment. It can also cover business income losses and the costs you incur to speed restoration of business operations when breakdown interrupts your operations. Many of our customers buy spoilage coverage to protect substantial values of perishable goods that spoil as

a consequence of a breakdown.

Because the costs of breakdown can be significant and these breakdowns occur often enough for there to be a legitimate risk to your organization's financial health or to the profits of your business.

If your business or organization owns, operates or depends upon some type of equipment to generate revenue, you need equipment breakdown insurance. Do you use electricity?

Do you heat, cool or refrigerate your premises? Do you have communication networks? Do you manufacture or process goods? Do you use equipment to sell, deliver service or help you keep track of sales? Do you use a lot of hot water? If so, you need equipment breakdown insurance.

Property insurance covers many standard perils, such as fire. But even "all risk" property coverage wasn't designed to pay for equipment accidents from the unique causes of equipment failure such as short circuits, centrifugal force or mechanical breakdown. Equipment breakdown coverage is specially designed to pay for damage caused by these risks. Because standard property policies don't cover equipment breakdown you need to ask to make sure it is included.

Equipment breakdown covers many types of equipment. It protects electrical systems, air conditioning and refrigeration, mechanical equipment, modern office equipment in addition to heating systems such as boilers. That's why "Equipment Breakdown Insurance" is a better description than "Boiler and Machinery Insurance."

Warranties and service contracts are important but they don't cover many of the common causes of equipment breakdowns. Maintenance contracts cover routine service such as cleaning or adjustment. But they don't pay for damage due to operator error, the cause of over 35% of equipment breakdowns. Equipment breakdown insurance does. Warranties and maintenance contracts also don't pay for business interruption or income loss resulting from breakdown. Nor do they pay for spoilage, damage to surrounding property or extra expenses to restore operations. Equipment breakdown insurance can cover all these risks.

You don't have to own a building to face an equipment breakdown risk. If you are a tenant you still have equipment such as phone systems, fax machines, computers, air conditioners and an electrical system. These types of equipment do fail and even a modest loss can be painful to a business. Your lease may also make you responsible for other equipment that services your premises. Lastly, your operations and income are dependent upon equipment of others. If the electrical, heating or cooling system of your landlord broke down, the interruption of those services can impact you. The right equipment breakdown coverage can protect you in this contingency.

Category: Insurance

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