What Is Equipment Breakdown Coverage?

Equipment breakdown coverage helps protect businesses from financial losses caused by mechanical, electrical or pressure system failures. It covers the cost of repairs, equipment replacement and sometimes even lost income if your operations are interrupted. This coverage protects your business from risks that standard property insurance typically does not cover, making it an important option for many small business owners.

Equipment breakdown coverage can help protect your business’:

Mechanical systems
Electrical systems
Computer systems
Appliances

For example, if your business’ generator fails during a storm and you lose power, equipment breakdown coverage may help cover the cost to repair or replace the generator.

What Does Equipment Breakdown Cover?

From mechanical or electrical systems to appliances, equipment breakdown insurance helps cover different types of equipment in your business. It can help if you experience an unexpected breakdown with your business’:

Air conditioning, such as the unit not blowing cold air and cooling off your building
Phone system if you’re not able to send or receive calls
Elevators if they stop working correctly
Manufacturing equipment if it doesn’t turn on after a motor burnout
Electrical panels and circuit breakers that stop working after a power surge

What Is Not Covered by Equipment Breakdown Insurance?

Equipment breakdown insurance doesn’t cover every scenario where your business’ equipment stops working. For example, if your equipment breaks down from normal wear and tear, this isn’t covered.

Equipment Breakdown Coverage Examples

Equipment breakdown coverage helps protect your equipment if they stop working due to an internal issue, like a power surge or part failure. Here are some examples of equipment breakdown coverage:

The machines you use for your manufacturing business fail after a motor breaks and you can’t operate. Equipment breakdown coverage can help replace your lost income while the machines get fixed.
A power surge damages your technology company’s computer system. Equipment breakdown coverage can help pay to repair or replace any computers that got damaged.
The air conditioning unit in your food distribution warehouse stops working. You can’t operate your business until the air conditioning units get fixed to make sure food doesn’t spoil. Equipment breakdown coverage can help replace your lost business income.

How Does Equipment Breakdown Insurance Differ From Boiler and Machinery Insurance?

Think of equipment breakdown insurance as a broader, more modern version of boiler and machinery insurance. Instead of just applying to boilers, equipment breakdown coverage also helps protect other types of equipment and systems at your business, such as computer systems and electrical systems.

How Is Commercial Property Insurance Different From Equipment Breakdown Insurance?

Commercial property insurance helps protect your owned or rented building, tools and equipment from property damage caused by external factors. This includes:

Fire
Storms
Burglary
Theft

Equipment breakdown insurance is different. It helps protect your business’ equipment if it stops working due to internal issues. This can be due to a parts failure or user error.

Is Equipment Breakdown Coverage Right for My Business?

Equipment breakdown coverage can help many business owners. This insurance works like equipment breakdown coverage for homeowners. It helps protect your business’ equipment. And because of the broad coverage, it makes the cost worth it.

Without this coverage, you’d likely be responsible for the replacement cost or repair of:

Equipment
Appliances
Systems

We’re an experienced insurance company backed by more than 200 years of experience. Our specialists can work with you to get equipment breakdown insurance or any other types of coverage you may need. Get a quote today.

Last Updated: August 8, 2025

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