Insuring Against Equipment Breakdown

Insuring against Equipment Breakdown is typically an optional coverage on business owner policies because it is very specific to the industry that you are in, but if you have machinery or equipment that is the lifeblood of your company, then this becomes an absolutely critical coverage for you to have in place to make sure that a breakdown doesn’t put you out of business.

Equipment Breakdown coverage protects you both from the formidable cost of making repairs when something breaks down, but also from the lost income that you suffer as a result of the down time. It covers electrical, mechanical, and pressure system accidental breakdowns on equipment such as boiler and pressure vessels, phone and security systems, heating and cooling systems, and it can include direct damages, business income and extra expenses, expediting expenses, hazardous substance damage and pollution, drying out, and more. It would also provide timely jurisdiction inspection and operating certification of boilers and pressure vessels which meets the needs of anyone subject to state legal requirements.

This is a pretty broad coverage that is really applicable to any business with equipment where there could potentially be an accidental mechanical, electrical, or vacuum failure, or any business subject to inspections and certification by city, county, or state regulations. Most frequently this includes restaurants, bakeries, residential facilities such as condos or nursing homes, hotels, and anyone operating a production facility.

When time is money and a systems breakdown means that you are unable to conduct regular business, coverage for equipment breakdown is absolutely critical to insure that you aren’t bearing the cost of expediting repairs and inspections to that you can get back to work… well as all of the income you lost during the down time.


This post was written by Aaron Nicklay, Agent with Farmer’s Insurance. For more information on Equipment Breakdown coverage and how Aaron can help protect your business, email him at or call (952) 229-5155.

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