Top 5 Questions on Equipment Breakdown

1. What are some examples of covered property on an equipment breakdown policy?
Anything in your business that can breakdown mechanically or electrically. Examples would be:
  • Boilers
  • Electrical Equipment
  • Air Conditioning Systems
  • Computers
  • Phone Systems
  • Refrigeration Units
  • Transformers

2. What does equipment breakdown cover?
It covers the perils of mechanical, electrical, and pressure system breakdowns. This could be possibly excluded or limited on your property form and is why it is an important coverage to be added.

3. How is equipment breakdown coverage added?
On most policies, the coverage is added as an endorsement and added as an underlying form on your policy. Depending on the size of the business, you could possibly need a stand-alone policy. Either way, our agency will structure your equipment breakdown coverage the best way it will work for your policy.

4. What is the difference between “wear and tear” and equipment breakdown?
Equipment breakdown is to cover a sudden event and damage typically will be arcing, rupturing, bursting, fracturing, seizing, and the operation of the machinery stops suddenly. Wear and tear usually occurs over time and is evidenced by damage like erosion, corrosion, rusting, leaking, squeaking and wearing with declining performance, capacity and functionality. Wear and tear usually is not covered on equipment breakdown. Therefore, it is very important to keep a thorough maintenance program on all your machinery.

5. What is an example of equipment breakdown?
Due to the low water conditions, the boiler at a dry cleaning business overheats and cracks. The business can’t move forward with the laundry for a number of days. The property damage related to a claim like this will pay for the amount to get the boiler up and running again. The amount to fix the boiler will be covered under equipment breakdown coverage.