The walk-in failed on Saturday night. Your property policy is probably not the answer.
Commercial property insurance pays when something happens to your equipment. It does not usually pay when your equipment simply stops working on its own. That difference is where the spoiled stock lives.
Start a quote file Read the short answer firstOutside cause, or the machine itself.
The stock, the unit, and the nights you stay shut.
Service records help show whether a failure was sudden.
Does my restaurant insurance cover food spoiled when a fridge or freezer fails?
Usually not under the property section on its own. A standard commercial property policy responds to damage from an outside cause, such as fire, water or theft, and it commonly excludes the mechanical or electrical breakdown of the equipment itself. Spoiled stock after a compressor burns out is answered by equipment breakdown cover, which is a separate section that has to be on the policy before the failure happens. There is a legal floor under the stock as well. BC’s Food Premises Regulation, in section 14, says every operator of food premises must ensure that “potentially hazardous food is stored or displayed at a temperature of not more than 4°C or not less than 60°C”. Once a unit stops holding that, throwing the stock out is not a judgement call. Read the Food Premises Regulation on storage temperatures (opens in a new tab).
Owners find this out at the worst moment, because nothing about a fridge failing feels like an exclusion. The policy is not asking what was damaged. It is asking what caused it. Fire damaged your freezer is a property claim. Your freezer broke is not, unless breakdown cover is there.
A single overnight failure produces three different claims, and they are not all answered by the same section. There is the stock, which is the loss you think of first. There is the unit itself, which may need a compressor or a full replacement. And there is the trading you lose while you are waiting, which is the one that keeps the doors shut, because a kitchen without cold storage does not open. Equipment breakdown cover can be written to answer all three, but each one is a separate item with its own limit, and a policy can carry one without the others.
Four things a kitchen owner should know before the next hot weekend.
It covers sudden failure, not wear
The trigger is an accident to the equipment itself. A motor burning out, an electrical fault, a surge from inside the building, a control board failing. What it does not cover is the gradual decline itself. Wear that finally causes a sudden failure is usually still a breakdown, but the wearing out is not covered, and insurers read the service history to tell the two apart. Records help you at claim time, and some wordings go further and make maintenance, a service agreement or a temperature alarm an actual condition of cover. Breaking one of those can cost you the claim, so read yours.
The stock limit is often small
Spoilage is usually a sub-limit inside the breakdown section rather than the full policy limit. On a busy kitchen with a stocked walk-in and a chest freezer it can be reached with one failure. It is worth knowing the number now, because it can usually be raised at any time before a loss, and it cannot be raised to cover a loss that has already happened.
Lost income has its own waiting period
Income cover after a breakdown often does not start at hour one. There is a waiting period, measured in hours, and short closures fall inside it. If your business cannot trade at all without one piece of equipment, that waiting period is the number to look at, not the limit.
A power cut is different again
If the power fails at the utility rather than in your building, nothing of yours has broken, so the breakdown trigger is not met on its own. What can answer is service interruption or off-premises power cover, and that is another separate item. It usually responds only where insured damage at the utility caused the outage, within a stated distance. Policies carry one without the other, which is why two neighbouring kitchens can get two different answers to the same blackout.
Three illustrations, not client files. Each turns on paperwork rather than on the freezer.
No service history
An old unit has never been on a service contract, because it has never given trouble. When it fails, there is nothing to show it was maintained. The claim turns into a long argument about wear against sudden failure, and the absence of records is what keeps it running.
Nobody knew until Monday
The freezer fails after closing and is found when the kitchen opens again. Everything is lost instead of some of it. A temperature alarm that texts a phone is simple to fit, and after a claim insurers often ask for one anyway. Fitting it first keeps the choice yours.
The stock figure is from before
The spoilage limit is set when the restaurant has one fridge and a small menu. The kitchen grows, the walk-in holds several times the stock, and the limit never moves. The claim is valid, the payment is capped, and the difference comes out of the business.
The ones that come up the morning after.
How do I know if I already have equipment breakdown cover?
Look at the declarations page for a separate line naming equipment breakdown, boiler and machinery, or mechanical breakdown. If you only see building, contents and business interruption, it is probably not there. Send us the page and we will tell you what it shows.
Is the food itself covered, or only the machine?
Both can be, but they are separate items. Spoilage cover pays for the stock, breakdown cover pays to repair or replace the unit, and income cover pays for the trading you lose. A policy can carry one and not the others, so the question to ask is which of the three are on yours and at what limits.
What if the landlord’s building system caused it?
Then it depends whose equipment failed and what your lease says. Building services in a leased unit often belong to the landlord, and their insurance answers for their equipment only if it includes breakdown cover, while your stock and your lost trading are still your loss. Your own breakdown section may carry service interruption cover that reaches a failure of the landlord’s building services, so check for it. This is worth checking before a failure, because the lease usually decides it and leases vary a great deal.
Does a generator solve the problem?
It solves a power cut. It does not solve a compressor failing, because the electricity was never the issue. A generator is genuinely useful and insurers like seeing one, but it covers a different risk from the one that closes most kitchens.
We are a small takeaway. Is this worth adding?
The question is not the size of the kitchen but whether you can trade without cold storage for a few days. If the answer is no, the exposure is the same as a large restaurant even though the stock is smaller, because the days you cannot trade cost the same either way.
Two that follow the same failure: how long business interruption keeps paying and what the unit itself is settled at.
Not the question you had? Send your declarations page and the question with it through the quote file and you will get a written answer, not a sales call.
Worth reading next: why property insurance skips the motor.
Check the policy while the fridge is still running.
Equipment breakdown is a small section with a large job. It takes a minute to confirm.