EQUIPMENT BREAKDOWN
Equipment breakdown insurance, for the systems that keep your business running.
Standard commercial property covers fires, theft, and weather, but excludes mechanical and electrical breakdown of business equipment. Equipment breakdown coverage fills that gap, covering boilers, HVAC, electrical systems, and production equipment.
What it covers
What equipment breakdown covers.
What it covers
Damage to the equipment itself
Repair or replacement of mechanical, electrical, or pressure systems that fail from internal causes: boiler explosion, HVAC compressor failure, electrical arc, motor burnout. Things standard commercial property insurance excludes.
What it covers
Business income from breakdown
If breakdown shuts down operations, business income coverage replaces lost profit and continuing expenses during repair. The right policy limit matters here, since this is often the largest financial impact of a breakdown event.
What it covers
Spoilage of refrigerated or perishable goods
Critical for restaurants, grocery stores, and food service businesses. Refrigeration failure can spoil substantial inventory; equipment breakdown covers that loss.
What it covers
Service interruption and utility coverage
If a utility company's equipment fails and disrupts service to your premises, some equipment breakdown policies extend to cover that interruption. Endorsement-driven; varies by carrier.
Where policies have edges
What equipment breakdown does not cover.
Not covered
Wear and tear, gradual deterioration
Standard exclusion. Equipment failing from age, lack of maintenance, or normal use is not covered. Sudden, accidental, internal failures are the trigger.
Not covered
External damage
Fires, water damage, theft, and weather events affecting equipment are commercial property exposures, not equipment breakdown. Both policies often work together.
Not covered
Faulty workmanship
Equipment damage from defective installation or repair work is typically excluded. The contractor's professional or general liability handles that.
Not covered
Earthquake and flood
Same as other commercial coverages. Equipment damage from those perils requires separate coverages, such as inland marine insurance for equipment in transit or on the move.
Who needs this
Who needs Equipment Breakdown Insurance.
Restaurants and food service (refrigeration, HVAC, cooking equipment), manufacturers (production equipment, conveyors, machinery), healthcare facilities (imaging, lab equipment, HVAC), office buildings (HVAC, electrical, elevators), data centers (servers, cooling, power), retail (refrigeration, HVAC, point-of-sale), and any business with substantial mechanical or electrical equipment. Many of these owners carry it as part of a business owners policy.
What it costs
What you can expect to pay.
Equipment breakdown is often added to a commercial property or business owners policy policy for $200 to $1,500 annually, with higher pricing for businesses with substantial equipment values, refrigeration, or production exposure.
In Georgia
How this works in Georgia.
Equipment breakdown is offered by most of the standard commercial carriers, often as an endorsement to commercial property or business owners policy rather than standalone. The Hartford Commercial, Travelers Commercial, Hanover Commercial, and CNA all write equipment breakdown across Georgia for restaurants, manufacturing, and standard commercial classes, all available through Olive Cover.
If You Need to File a Claim
Claims tips
First Steps
Shut down the failed equipment immediately to prevent secondary damage, continued operation after a breakdown can void coverage for the additional damage. Call your carrier the same day. Most equipment breakdown policies require prompt notice, and delays can complicate the claim. Do not attempt repairs or authorize a repair vendor until the carrier assigns an adjuster or gives written authorization.
What to Document
- Photograph the failed equipment from multiple angles before anything is opened or moved
- Preserve any error codes, control panel readings, or diagnostic printouts at the time of failure
- Pull maintenance logs, carriers will ask for them to distinguish a covered mechanical failure from a maintenance issue
- Record the date, time, and circumstances when the failure was first noticed
- Track every hour your operations are affected; business income coverage under this policy runs from the date of breakdown, so lost-revenue documentation starts on day one
Common Mistakes
- Authorizing emergency repairs before the adjuster inspects, once the broken component is removed or altered, the carrier loses the ability to verify the cause of failure
- Assuming the loss falls under commercial property, fire, water, or theft damaging equipment is a property claim; an internal mechanical or electrical failure is an equipment breakdown claim; filing under the wrong policy delays payment
- Not pursuing the business income portion, policyholders focused on getting the machine fixed often forget to submit lost-income documentation, which is a separate covered component
When to Call Us
Any time a key piece of equipment stops functioning from an internal cause, a compressor seizes, a boiler fails, an electrical panel shorts, and your carrier's instructions are unclear. We can help clarify what your specific policy requires before repairs begin, and make sure the business income piece of the claim is properly opened alongside the repair claim.
OUR CARRIER PANEL
Carriers We Work With
The carriers we compare are licensed and regulated in your state. We shop these markets and present the options that match your situation; a licensed advisor reviews the fit with you in a free coverage review.
Carriers reviewed by Olive Cover that write this coverage. An honest look at their appetite, strengths, and fit:
Common Questions
Equipment Breakdown Insurance: frequently asked questions
How much does equipment breakdown coverage cost?
Most businesses pay $200 to $1,500 annually when added as an endorsement to business owners policy or commercial property. Standalone equipment breakdown for larger operations runs higher, scaling with equipment values and spoilage exposure.
Does equipment breakdown cover spoilage of refrigerated goods?
Yes, when the spoilage is caused by a covered equipment breakdown event. Critical coverage for restaurants, grocery stores, food service, and pharmaceutical businesses.
What’s the difference between equipment breakdown and commercial property?
Commercial property covers external perils: fire, theft, weather, vandalism. Equipment breakdown covers internal failures: boiler explosion, electrical arc, motor burnout, refrigeration compressor failure. Both are needed.