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.
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.
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.
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.
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.
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