Equipment downtime due to unexpected breakdowns or machine failure can quickly lead to losses piling up.
If you own a manufacturing company or provide a service, the success of your business depends largely on the smooth and efficient functioning of your machinery and equipment.
Internal forces such as electrical and mechanical incidents or perhaps operator error can cause damage to equipment as well as property damage, leading to production delays, disruptions and stoppages, lost business and revenue.
What is Equipment Breakdown?
Equipment Breakdown insurance (sometimes called boiler and machinery coverage) pays to repair or replace covered equipment after sudden mechanical or electrical failure. It is distinct from general property coverage and complements commercial liability or commercial auto exposure policies by addressing the physical failure of machines, HVAC systems, production lines, or specialty medical devices.
Who needs it
Businesses that rely on mechanical, electrical, or electronic systems commonly seek this protection: manufacturers, food processors, retailers with refrigeration, contractors using rented machinery, and healthcare providers with diagnostic equipment. Owners of expensive commercial equipment often add this coverage to reduce interruption risks and protect inventory. For broad equipment portfolios, see the Commercial Equipment Insurance resource at https://completemarkets.com/Commercial-Equipment-Insurance/Storefronts/ for related considerations.
What it typically covers
Policies often cover repair or replacement costs, business interruption and extra expense during downtime, and loss to spoiled goods or media data loss. Coverage can extend to on-site and, in some forms, off-premises equipment exposures for equipment that travels or is temporarily relocated. Learn more about off-premises and purchasing considerations at https://completemarkets.com/Planned-Unit-Developments-Umbrella-Equipment-Bre-Insurance/Storefronts/.
- Repair or replacement of failed machinery
- Business income and extra expense during restoration
- Damage to dependent equipment or spoiled inventory
Common exclusions or limitations
Standard exclusions can include wear and tear from lack of maintenance, defects known before the policy began, intentional damage, and certain types of corrosion. Many policies also limit coverage for software failure or cyber-related causes unless specifically endorsed. Underwriting factors and defined exclusions determine what is and isn’t covered.
Factors that influence cost
Premiums depend on the value and age of equipment, maintenance programs, operational hazards, location, business income exposure, and prior loss history. Implementing preventive maintenance and risk management practices often reduces underwriting risk and can lower cost over time.
Proof of insurance & compliance
Lenders, landlords, and contract partners may request certificates or specific endorsements showing equipment coverage limits and business interruption terms. Certain industries—like medical or food service—may also require documentation tailored to their equipment standards; see an industry-specific example at https://completemarkets.com/Medical-Dental-Equipment-Insurance/Storefronts/.
How to get a quote
To get an accurate quote, gather a schedule of equipment, recent maintenance records, and descriptions of operations that depend on the equipment. A broker or underwriter will review exposures, discuss available limits and endorsements, and recommend risk-management steps. Get a quote at https://completemarkets.com/quote/.
Risk scenario: a sudden motor failure on a production line can halt operations and create both direct repair costs and lost revenue while repairs are arranged.
Frequently Asked Questions
Does Equipment Breakdown replace standard property insurance?
No. Equipment Breakdown is intended to complement property insurance by covering sudden mechanical and electrical failures that typical property policies may exclude or limit.
Will poor maintenance claims be covered?
Claims resulting from neglect, lack of maintenance, or wear and tear are commonly excluded. Regular maintenance records help support coverage and may be required by underwriters.
Can business interruption be included if equipment fails?
Yes. Many policies include business interruption and extra expense coverage to reimburse lost income and costs to expedite repairs, subject to policy terms and waiting periods.
Still have questions? Talk to a local insurance expert.