Understanding Equipment Breakdown Coverage

No matter what type of business you own, you rely on equipment to some degree to deliver products and/or services to your customers. Whether it’s the air conditioning unit or your computer network, an equipment breakdown could negatively impact your operation–and ultimately, your bottom line.

Equipment breakdown insurance helps keep your out-of-pocket expense to a minimum when your equipment bites the dust. Ask your broker if you can add this optional coverage to your commercial property insurance policy.

Types of Equipment Covered

If an accident damages your business equipment or breaks down, equipment breakdown insurance can help cover the cost of replacing or repairing it. This coverage applies to any equipment you use to keep your business running, including:

• Mechanical and electrical equipment
• Computers and communication equipment
• Air conditioning and refrigeration systems
• Boilers and pressure equipment
• Security and alarm systems

If you operate a food business, coverage may also help replace food spoiled because of an equipment breakdown.

Covered Incidents

There are many reasons your business equipment could become inoperable and force you to repair or replace it. Depending on the policy you select, the covered incident may include:

• Operator error
• Power surges
• Short circuits
• Mechanical breakdowns

To figure out the appropriate amount and limits of equipment breakdown insurance that is right for your business, you should factor in more than just the cost of replacing the equipment. Also, consider whether the breakdown could cause damage to your facility or cause you to shut your business down for several hours or several days.

Talk to your insurance advisor about the various scenarios that could result if your equipment breaks down. We want to help you ensure that you select a policy that protects your business no matter what situation occurs!