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 often the bigger loss.
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 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 none of those.
Notice what is not on that list, and notice what is not on the Bureau’s list of business coverages at all. Equipment breakdown is a separate policy with its own name, and a business that has never been asked about it usually does not have it. 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 rarely 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 is usually written to answer for the damage, the spoiled stock and the days lost, which is why it is worth more than the price of the part suggests. Read the Insurance Bureau of Canada on business coverages (opens in a new tab).
Four machines that stop a business.
Refrigeration
Walk-ins, display cases, cold rooms. The unit is one bill and the stock inside it is another, and the second one is usually larger.
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 failures, three ordinary Mondays.
The compressor that gave up
No fire, no storm, no break-in. The unit simply stopped overnight. The property policy had nothing to answer, because nothing had happened to it from outside.
The panel that took the line down
An electrical fault in the supply. The repair was a day. The order that missed its ship date was the number that hurt.
The part that took nine weeks
The machine was insured and the repair was covered. The replacement part came from overseas, and nine weeks of not producing was the loss nobody had planned for.
The questions owners ask after the first failure.
Is this not just an extended warranty?
No. A warranty repairs or replaces the item. Equipment breakdown cover is written to answer for the damage the failure causes, the stock it spoils and 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 changes the odds a little. It does not change what a property policy will pay.
We lease the machine. Whose problem is it?
Read the lease, because it usually says. Many leases put the duty to insure on you while the machine belongs to somebody else. Send us the lease and we will read that clause.
Does it cover the food that spoiled?
Usually yes, where the spoilage follows a covered breakdown. That is often the largest single part of the claim, so it is worth confirming the limit rather than assuming it.
What about the days we could not trade?
That is the part most worth having. Ask for it specifically, because cover for lost income after a breakdown is not always included by default.
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 one of the cheapest lines a business can add and one of the least often offered. Ask before you need it.