Equipment Breakdown Insurance Coverage

Owning your own business can be a rewarding experience, but it also means that you have to contend with risks that may impact your assets and business potentially in a negative way. One of these risks is equipment breakdown. Unfortunately, equipment breakdown can take its toll on a business, possibly causing you to lose thousands of dollars in the process.


Fortunately, as a business owner, you have the option of purchasing a special insurance policy called equipment breakdown insurance coverage, which will provide coverage in the event that your business equipment breaks down. Equipment breakdown, including situations such as your manufacturing machine malfunctioning, your office’s electrical system short circuiting, or a power outage causing your network and office machinery to halt, can all lead to a loss in production and business income. To avoid these risks, be sure to obtain equipment breakdown insurance coverage.

Equipment Breakdown Risks

Regardless of the type of business you own, you’re most likely faced with the reality of equipment breakdown risks. The type of equipment breakdown you encounter, though, will vary based on your industry. For example, if you run a construction company, proper functioning of your equipment (heavy duty or lightweight) and power tools are your biggest concerns. On the other hand, if you operate a manufacturing plant, you not only need to worry about proper functioning of factory machinery, but also power outages and short circuits. That said, power outages and electrical issues are a concern for any type of business, and can potentially cause detrimental consequences. Without equipment breakdown insurance coverage, losing power for even an hour can cause a variety of issues including electrical office equipment not working, the loss of customers and clients who can’t reach you, and thousands of dollars lost from your network being down.

Equipment Breakdown Insurance Coverage

The type of equipment breakdown that is covered under your policy will vary based on the policy itself. Some of the types of equipment covered by most policies include computer equipment, office equipment, factory and manufacturing equipment, electrical systems, heating and cooling systems, refrigeration, and a variety of other miscellaneous equipment used in the office or place of business such as computers, servers, and other electrical devices.

Some of the common coverages include covering the cost to repair or replace malfunctioning equipment, labor costs for professionals who repair your equipment, paying salary and providing company financial assistance, business income assistance as a result of the loss of production and operations during power outages, and a number of other coverages.

Who Needs Equipment Breakdown Insurance?

Whether it’s a refrigeration unit keeping your food cool, computer servers for your company website, or machinery equipment for production, any type of business with electrical, mechanical, or pressure equipment that is depended upon to keep business operations going, should have equipment breakdown insurance coverage. Unexpected events can’t be helped, but the amount of money your business loses as a result, can be, with the right kind of insurance.

Preparing for unexpected equipment breakdown events — whether it is a power outage from a natural disaster, malfunctioning equipment, or other risks in regards to your equipment — is a smart business move. Having equipment breakdown insurance coverage can help you avoid losing valuable customers and clients, as well as your overall reputation.