Nothing burned. Nothing flooded. The machine simply stopped.
Property insurance responds to events, fire, water, storm, theft. It does not respond to equipment failing on its own.
Build the operations file What it covers Talk to a brokerSudden mechanical and electrical failure, plus spoiled stock and downtime
Anyone with refrigeration, boilers, HVAC, elevators or production plant
What equipment you rely on and how long a replacement takes
What is equipment breakdown insurance?
It covers sudden mechanical or electrical failure of equipment you own or are responsible for, boilers, compressors, refrigeration, heating and cooling systems, elevators, electrical panels and increasingly the computer systems that run all of them. It pays to repair or replace the equipment, and usually for the damage that failure causes, including spoiled stock and the income lost while you cannot operate.
A cooler failing overnight is not a property claim, so without this cover the spoiled stock, the closed days and the customers who went elsewhere are all yours. Add up the stock in the cooler and the days you would be shut, and that is the number this cover is written against. Technical Safety BC describes its own reach: “We oversee the design, construction, installation, and operation of boilers, pressure vessels, pressure piping systems, and fittings throughout BC.” Equipment a regulator watches that closely is equipment a property policy was never built to insure. Read Technical Safety BC on boilers and pressure vessels (opens in a new tab).
A standard property policy excludes this, because breakdown is a maintenance and wear question rather than an event.
More than the machine itself.
The equipment
Repair or replacement of the failed unit, including the labour and the emergency call-out.
Spoiled stock
Refrigeration failing overnight. This is the claim the cover exists for in a food business.
Lost income
Business interruption caused by the breakdown, which a standard interruption policy will not pay because there was no insured damage.
Damage to other property
What the failure caused, water from a burst boiler, a power surge through connected equipment.
Expediting expenses
The cost of getting a part flown in or a crew working overnight to shorten the outage.
Computer and control systems
Modern equipment fails at the controller as often as at the machine. Cover should follow the electronics.
This is cover we place direct with the insurer, with a choice of deductibles, not something we have to go looking for. Tell us what equipment the business depends on and we can price it.
Who needs it most.
If your business stops when a specific machine stops, this is not optional cover.
Anything refrigerated
Restaurants, grocers, cold storage, pharmacies. The stock is the exposure, and it can be lost overnight.
Manufacturing and processing
Production lines, compressors and specialist plant with long replacement lead times.
Buildings with shared systems
Strata and commercial buildings with boilers, elevators and central HVAC serving many occupants.
How this can play out.
A walk-in cooler controller fails on a Friday night and nobody sees it until Monday. Nothing burned, nothing flooded, and the property policy pays nothing. Equipment breakdown covers the unit, the spoiled stock and the days you were closed.
It is easy to leave off.
Because it does not feel like a disaster until it happens.
Nobody imagines the business closing because a compressor failed. It is easy to drop when a quote is being trimmed, and dropping it never shows up on a comparison of premiums.
Ask us what it costs on your policy before you decide, and price it against the equipment the business actually runs on.
Worth reading next: why property insurance skips the motor.
The conditions inside breakdown cover.
Equipment breakdown answers for the failure a property policy calls wear and tear. It has its own expectations, and they are practical ones.
Maintenance records that do not exist
Wordings expect equipment serviced the way the maker intended. After a failure, the service log is the first document requested, and the hardest one to create afterwards.
The bypass that became permanent
A safety control jumpered out for a busy week, still jumpered a year later, reads as a choice at claim time. Temporary fixes age badly in adjusters’ files.
Used gear with no inspection
Second-hand equipment brought in without records or inspection can carry an exclusion it never gets to explain. Declare it on the way in, not after it stops.
The downtime nobody insured
The machine is one claim. The income lost while parts cross an ocean is another, and it only pays if breakdown cover was extended to include it.
A service binder and an honest equipment list do most of the work. Check that the policy knows what is actually on the floor.
What owners ask us.
Is machinery breakdown covered by my property policy?
No. Property insurance responds to events like fire, water and theft. Mechanical or electrical failure on its own is excluded and needs equipment breakdown cover.
Is spoiled stock covered when a cooler fails?
Under equipment breakdown with spoilage cover, generally yes. Under a standard property policy, generally not, because nothing was damaged by an insured peril, the machine simply stopped.
Does it cover wear and tear?
No. It covers sudden and accidental failure, not gradual deterioration or a machine reaching the end of its life. Maintenance records help considerably at claim time.
Does it cover lost income during a breakdown?
It can, and this is the part to check. Standard business interruption requires insured physical damage, which a breakdown does not produce, so the interruption cover has to sit inside the equipment breakdown section.
What about computers and control systems?
Modern policies generally extend to electronic and control equipment. Given how much plant now fails at the controller rather than the motor, it is worth confirming yours does.
We rent our premises. Is this the landlord’s problem?
Only for equipment the landlord owns. Anything you installed, and your stock and income, remain yours to insure.
Breakdown sits alongside commercial property, which covers the events instead.
Which machine stops your business?
Tell us what it is and how long a replacement takes. That answers most of the question.