Equipment breakdown coverage

Equipment breakdown coverage is an insurance endorsement for commercial property insurance. It protects your company’s computer hardware, electrical systems, production machinery, and other equipment from sudden and accidental malfunctions.

It’s designed to cover losses such as short circuits, loss of air pressure or vacuum, breakdown due to operator error, electrical breakdowns, or power surges that commercial property insurance typically excludes.

If you’re learning how to start a mechanic shop or starting an EV business, equipment breakdown coverage is important for protecting essential tools and machinery—like lifts, compressors, and diagnostic equipment—that are critical to your operations.

Personal homeowner's insurance and renter's insurance policies generally do not cover commercial property, so it's important to ensure you have the right coverage for your equipment. Even if you have a home-based business or store business equipment in your home, you'll still need commercial coverage.

Equipment breakdown insurance coverage is designed to protect various types of equipment, including:

• Computers and telephone equipment
• Mechanical system components
• Manufacturing equipment
• Refrigeration devices
• Heating and ventilation systems and air conditioner units, such as HVAC systems
• Water heaters and water pumps
• Elevators and escalators
• Security systems
• Retail point-of-sale devices
• Ovens, washers, dryers, dishwashers
• Compressors

Many types of equipment are covered, but certain household appliances and smaller electrical tools are not considered covered equipment, even if they are used for business purposes.

This coverage doesn’t require that the equipment breakdown resulted from a covered event in a property insurance policy, such as a fire. Coverage can kick in after an equipment malfunction.

Equipment breakdown coverage is a newer form of coverage than boiler and machinery insurance, which was introduced when steam boilers were a major source of industrial power.

The terms are relatively interchangeable, however few insurance companies still call it "boiler and machinery insurance," despite them functionally covering many of the same things.

Today, businesses rely on electricity to run a much broader range of equipment, which equipment breakdown coverage is designed to protect.

Equipment breakdown insurance covers many major expenses that small businesses face from mechanical breakdowns and other costly equipment incidents. Insureon helps small business owners compare commercial insurance quotes with one easy online application.

Discuss your options for purchasing equipment breakdown insurance with a licensed Insureon agent. The coverage is readily available as an endorsement to commercial property insurance, a business owner’s policy, or a commercial package policy.

If you don't already have commercial property insurance, you'll need to obtain that first before adding the equipment breakdown endorsement. Equipment breakdown coverage cannot be a standalone policy without commercial insurance.

Start an application today to reduce your risks and obtain all the liability insurance coverage you need for your business. Most small business owners receive a certificate of insurance within 24 hours.