Equipment Breakdown Coverage
Equipment breakdown insurance protects your business’ mechanical, electrical, and computer equipment from sudden and accidental failure. This coverage is designed to cover short circuits, loss of air pressure, power surges and other breakdowns that standard business property insurance excludes.
FAQs
WHAT DOES COLLISION INSURANCE COVER?
Equipment breakdown insurance typically covers the following categories of equipment:
- Mechanical
- Electrical
- Computer & telephone equipment
- Manufacturing
- Air conditioning & refrigeration systems
- Heating & ventilation systems
- Boilers & pressure equipment
- Elevators & escalators
- Security & fire alarm systems
This insurance can help protect you in the event of a power surge, short circuit, pressure loss, motor burnout and more. Most equipment breakdown policies cover the following types of losses:
- The cost to repair or replace the damaged equipment, including time and labor
- Business income lost while the equipment was out of order
- Spoiled or damaged inventory
- Expenses incurred during the period of restoration
Doesn’t my business property policy cover equipment breakdown?
It is a common misconception business property insurance covers the kinds of losses mentioned above. Generally, business property coverage protects against external causes of loss (like fires), while equipment breakdown coverage protects against internal causes of loss (like an electrical short). So while property and equipment breakdown coverage go hand in hand and are often purchased in conjunction with one another, they are intended to offer different protection.
What doesn’t equipment breakdown insurance cover?
Every equipment breakdown policy has different exclusions, depending on the insurance carrier. Usually coverage will exclude the following type of losses:
- Wear & tear
- Computer and phone software
- Corrosion
- Improperly stored equipment
- Mold
- Damage due to operator error
- Pests
What are some examples of equipment breakdown losses?
Having equipment breakdown coverage comes in handy in a variety of scenarios. Below are some examples of how having this coverage could help you during a less than ideal situation.
- Your accounting firm experiences a power surge during a storm. After the power is restored, you discover that the business phone and computers aren’t working. Your equipment breakdown policy can help cover the cost of repairing or replacing the damaged equipment.
- You own a restaurant and the motor inside your commercial refrigerator burns out. It takes hours to get the repairman out and in the meantime, all the food inside the refrigerator goes bad. An equipment breakdown policy could help you cover the costs to repair the refrigerator’s motor and replace the spoiled inventory.
- Your clothing store serves walk in customers and takes online orders. Your electrical equipment suffers a short circuit and you have no power to your computers, causing you to lose online orders. You also lose walk in business since there is no air conditioning or lighting. If you purchased equipment breakdown coverage, you could be reimbursed for your lost income.
Do I need equipment breakdown insurance?
Today, almost every business relies on equipment for its daily operation. In fact, many businesses rely on equipment, from phone systems to refrigerators, to generate income. If your business equipment is expensive to repair or replace, you might want to consider equipment breakdown coverage. In particular, business that deal with food, rely on computer and phone systems or utilize machinery and tools could be greatly impacted by an equipment breakdown loss.
How much does equipment breakdown coverage cost?
Pricing for equipment breakdown insurance varies depending on several factors. Such factors include: the value of the equipment being insured, the age of the equipment, the type of the equipment and the deductible selected. The best way to know what an equipment breakdown policy would cost is gives us a call.