A property policy answers for what happens to your machine, not for what happens inside it.
Fire, storm, theft and vandalism are things that arrive from outside. A motor that burns out, a compressor that seizes, a control board that fails, a transformer that lets go. Those come from inside the machine, and that is the line a commercial property policy draws.
Build the operations file Read the short answer firstFire and storm are property claims.
Mechanical and electrical failure is not.
The lost days are a third loss again.
Why will my property policy not pay for the motor?
Because it insures the equipment against causes that come from outside it. The Insurance Bureau of Canada (opens in a new tab) describes commercial property as covering “loss or damage related to multiple causes including severe weather events and vandalism”. A motor failing on its own is not that kind of cause, and standard commercial property wordings exclude mechanical and electrical breakdown of the equipment itself. If that failure starts a fire, the fire damage generally goes back to the property section, but the failed part does not.
The cover for that has its own name. The Insurance Institute of Canada’s definition, published in IBC’s glossary, calls it boiler and machinery insurance: “Coverage against loss caused by equipment breakdown and malfunction, as well as sudden explosions arising from the ownership, use, and operation of boilers, pressure vessels, and machinery.” It is written as a separate section of a package policy, and sometimes as a policy of its own. It is the cover for the machine failing by itself, and for what that failure then does.
Owners price the repair and stop there. The repair is often not the expensive part. A failed compressor spoils what was inside it. A failed transformer stops the whole line for a week. A failed boiler closes the building until it is replaced. Equipment breakdown cover can be written to answer for the damage, the spoiled stock and the days lost, each as a separate item with its own limit, which is why it is worth more than the cost of the part suggests. Read the IBC glossary (opens in a new tab).
Four machines that stop a business.
Refrigeration
Walk-ins, display cases, cold rooms. The unit is one bill, the stock inside it is another, and the days you cannot trade are a third. Any of the three can be the biggest.
Electrical supply
Panels, transformers, switchgear. When this fails nothing else runs, so the loss is the whole operation rather than one machine.
Heating and pressure equipment
Boilers, hot water systems, compressors. Failure here can close a building on safety grounds even when nothing has actually broken around it.
Production machinery
The one machine the whole floor waits on. Ask how long a replacement takes to arrive, because that answer is the real size of the risk.
Three ordinary Mondays. All three are illustrations, not client files.
The compressor that gives up
No fire, no storm, no break-in. The unit simply stops. The property policy has nothing to answer, because nothing has happened to it from outside.
The panel that takes the line down
An electrical fault in your own panel. The repair is quick. The days of lost production while the parts are found are what hurts.
The part that comes from overseas
The machine is insured and the repair is covered. The replacement part is built to order abroad, and the months of not producing are the loss nobody planned for.
The questions owners ask after the first failure.
Is this not just an extended warranty?
No. A warranty is the maker’s promise about the item. Equipment breakdown cover can answer for repairing or replacing the unit, for the damage the failure causes, for the stock it spoils and for the trading you lose while it is down.
My equipment is new. Do I still need it?
New equipment fails too, and newer machines often have more electronics in them, not fewer. Age can change the price and the terms. It does not change what a property policy will pay.
We lease the machine. Whose problem is it?
The lease usually says. A lease can put the duty to insure on you while the machine belongs to somebody else. Send us the insurance clause from the lease and we will check your policy against it.
Does it cover the food that spoiled?
Usually yes, where the spoilage follows a covered breakdown. Spoilage is normally a sub-limit rather than the full limit, so it is worth confirming the number rather than assuming it.
What about the days we could not trade?
Ask for it specifically, because cover for lost income after a breakdown is not always included by default, and it usually starts only after a waiting period measured in hours.
Two that sit next to this on the same site: when the walk-in fails on its own, and how long business interruption actually pays.
Not the question you had? Tell us what you run and a licensed person will answer it. Use the short contact form.
The machine will fail on a Monday. Decide now who pays.
Equipment breakdown is a small section with a large job. Ask before you need it.
Checked for technical accuracy by Amrit Sidhu of S&S Insurance Services Ltd. Last checked 28 September 2026.