Equipment Breakdown Insurance
Equipment breakdown insurance — formerly known as boiler and machinery insurance — covers the sudden and accidental mechanical or electrical failure of business equipment. Your commercial property policy covers fire, theft, and weather damage, but it specifically excludes mechanical breakdown. When your HVAC system fails, your commercial refrigeration unit burns out, or your electrical panel shorts — equipment breakdown coverage pays for repair, replacement, and the business income you lose during downtime.
Coverages we place
- Repair or replacement costs for failed equipment
- Business income loss during equipment downtime
- Spoilage of perishable goods (restaurants, grocers, pharmacies)
- Extra expense to maintain operations during breakdown
- Electrical arcing, short circuits, and power surges
- Mechanical failure of HVAC, compressors, and motors
- Computer and electronic equipment failure
- Pressure vessel and boiler failures
Who needs this coverage
Restaurants, grocery stores, pharmacies, manufacturing facilities, medical offices, data centers, commercial property owners, hotels, laundromats, and any business dependent on mechanical or electrical equipment for daily operations.
What drives your premium
- Total value of covered equipment
- Type of equipment (refrigeration, HVAC, manufacturing machinery)
- Age and condition of equipment
- Maintenance history and programs
- Business income exposure during downtime
- Spoilage exposure (restaurants, pharmacies)
Common exclusions
- Fire, theft, weather damage (covered by commercial property)
- Normal wear and tear and gradual deterioration
- Cosmetic damage that doesn't affect function
- Testing and commissioning of new equipment
- Equipment used beyond manufacturer specifications
Frequently asked questions
Doesn't my commercial property policy cover equipment breakdown?
No. Standard commercial property policies explicitly exclude mechanical and electrical breakdown. They cover fire, theft, and weather damage to your equipment, but not internal failure. Equipment breakdown is a separate coverage that fills this specific gap.
How much does equipment breakdown insurance cost?
Equipment breakdown coverage typically costs $200–$2,000/year and is often added as an endorsement to your commercial property policy. Given that a single HVAC failure can cost $5,000–$25,000+, it's one of the most cost-effective coverages available.
Does this cover food spoilage?
Yes. Equipment breakdown with a spoilage endorsement covers perishable goods lost when refrigeration or climate control equipment fails. This is critical for restaurants, grocery stores, florists, and pharmacies.
Related coverage
Get a free quote or call (321) 206-8035.