Equipment Breakdown Insurance: The Complete Guide
Equipment breakdown insurance covers a wide variety of machinery and materials, except normal wear & tear, software & cyber security.
When equipment breaks down in your business, how do you afford to get it fixed? With the right equipment breakdown insurance, the answer is simple – your insurance will help you get back up and running.
What is equipment breakdown insurance and why do you need it? Let’s take a look.
What is Equipment Breakdown Insurance?
There are many different kinds of business insurance. Your business owner’s policy (BOP) includes liability coverage, commercial property insurance, and business income insurance.
You might think that commercial property coverage would help you get equipment fixed. but commercial property insurance only applies if the damage is due to external forces, like fire, theft, or lightning. It does not cover flood, earthquake, or internal factors like power surges, mechanical breakdown, or user error.
To get coverage for those internal causes of equipment breakdown, you’d need to add equipment breakdown insurance. If your company relies on equipment to be working to serve your customers, this is an important type of insurance to add to your coverage.
What Does Equipment Breakdown Insurance Cover?
Equipment breakdown coverage applies a wide variety of different machinery and materials. Keep in mind that breakdown due to normal wear and tear is not covered.
Equipment breakdown generally covers five categories of equipment:
- Mechanical, such as generators, motors, water pumps, and production equipment
- Electrical, such as electrical panels, cables, and transformers
- Computers and Communications, which includes computer systems, fire and security systems, and phone systems
- Air conditioning and refrigeration
- Boilers and pressure equipment
You can also get reimbursed for spoiled inventory and lost income due to equipment failure.
Equipment breakdown insurance replaces an older coverage called “boiler and machinery insurance,” providing broader coverage and modernizing the language around what equipment is covered.
Keep in mind that this type of coverage does not cover software or cyber-security. To protect your electronic assets, you’ll need to look at a separate policy.
Why Purchase Equipment Breakdown Coverage?
Almost any business would struggle to recover from a major equipment breakdown. For example, a restaurant might lose thousands of dollars in inventory due to a freezer breakdown after a power surge. Schools, hospitals, and a variety of other businesses also rely on their computers and equipment to care for others and keep them safe.
These types of repairs are not covered by other parts of the business owner’s policy. It might help you recover after a fire or theft, but mechanical and electrical damage, along with user error, are generally excluded.
To protect your business and make repairs easier to manage, you’ll want equipment breakdown insurance.
Get Peace of Mind with the Right Insurance Coverage
A business has a lot to lose if a significant piece of equipment breaks down. You not only need to repair the equipment, but you’ll also need to recover the income you could have made during that time and replace anything that was damaged due to the breakdown.
The best way to do that is with equipment breakdown insurance. If you’re ready to rest easy knowing that the major equipment your business relies on is protected, contact us today.
We are the Extra Milers to protect businesses and properties
The Rick Callaway Team is known as the Extra Milers in protecting your business, employers, employees, and assets. We leave no stone unturned to get you the best deal. No under coverage. No overpricing. Fast turnaround. We have board level business acumen for understanding your business operations to customize your coverage. Please call us for a free consultation: 925-788-5558 or email us at: firstname.lastname@example.org.