What this coverage is
Equipment breakdown insurance, sometimes called boiler and machinery coverage, helps with the sudden and accidental failure of essential equipment such as electrical systems, HVAC, refrigeration, production machinery, and computer systems.
Standard commercial property policies commonly exclude losses from mechanical or electrical breakdown, which is the gap equipment breakdown coverage is designed to fill. It often includes resulting damage and lost income tied to the failure.
Who commonly needs it
Businesses that rely on machinery, climate control, refrigeration, or computer systems to operate commonly add equipment breakdown coverage to protect against costly failures.
Where this coverage commonly fits
Operational — coverage tied to how a business physically operates day to day — its property, vehicles, and equipment. Equipment breakdown commonly fits businesses that depend on mechanical, electrical, or refrigeration equipment.
- Manufacturers with production equipment
- Restaurants and food businesses with refrigeration
- Healthcare facilities with critical systems
- Hotels and venues with HVAC and electrical systems
- Property owners with building systems
What it may cover
- Sudden mechanical or electrical breakdown of covered equipment
- Cost to repair or replace failed equipment
- Resulting damage from a covered breakdown
- Spoilage of perishable goods from a covered failure
- Lost income and extra expense from a covered breakdown, when included
What it typically excludes
- Wear, tear, and gradual deterioration
- Lack of maintenance and pre-existing defects
- Losses covered under standard property perils such as fire
- Damage from external causes rather than internal failure
- Obsolescence or upgrades beyond restoration
Hypothetical claim scenarios
These illustrative examples are for general understanding only. Coverage depends on the specific policy terms, conditions, and exclusions.
Refrigeration failure
A restaurant's walk-in cooler suffers an electrical failure and spoils inventory. Equipment breakdown coverage may help with repairs and spoilage, subject to policy terms.
Production machine breakdown
A key production machine breaks down, halting output. The policy may help with repairs and resulting lost income, subject to terms.
Electrical surge
A power surge damages computer systems and HVAC controls. Coverage may help repair or replace the affected equipment, subject to deductibles.
What commonly affects cost
- Type, age, and value of critical equipment
- Industry and dependence on continuous operation
- Maintenance practices and protective systems
- Selected limits, deductibles, and business-income options
- Claims history
How much does it cost?
On average, many businesses pay roughly $200–$800 per year, often added to a property policy for equipment breakdown insurance. That figure is a general national average only — your actual premium is set during underwriting.
- Equipment Breakdown Insurance$200–$800 per year, often added to a property policy
These are general national averages shown for comparison only — not a quote. Actual premiums vary widely with underwriting and depend on the factors above and the specifics of your business, including size, revenue, location, claims history, and the limits you choose. See how we estimate costs.
Industries where this coverage is common
Coverage needs vary business to business — most companies consider this protection regardless of industry. These are simply the industries where we see it most often.
See how this coverage works in your industry
A few examples from the business types we cover — this coverage applies well beyond the industries shown here.
Don't see your business type? Browse all industries we cover — coverage recommendations are tailored to every operation.
Frequently asked questions
How is equipment breakdown different from commercial property?
Commercial property commonly excludes mechanical and electrical breakdown. Equipment breakdown coverage is designed to fill that gap for sudden, accidental internal failures.
Does it cover spoilage?
Many policies include spoilage coverage when a covered breakdown, such as a refrigeration failure, damages perishable goods, subject to limits.
Does it cover wear and tear?
No. Gradual wear, deterioration, and lack of maintenance are generally excluded. Coverage focuses on sudden and accidental breakdown.
What equipment is typically covered?
Coverage commonly extends to electrical systems, HVAC, refrigeration, boilers, production machinery, and computer or communication systems.
Can it include lost income?
Yes. Many policies can include business income and extra expense to help when a covered breakdown interrupts operations.
How do I get a quote for this coverage?
Call The Southern Agency at 1-800-777-1872 or request a quote online, and an advisor can help tailor coverage to your business.
Related coverages
- Commercial Property Insurance Coverage for buildings, equipment, inventory, and fixtures against covered perils.
- Inland Marine Insurance Coverage for movable property, tools, and equipment in transit or off-premises.
- Builders Risk Insurance Coverage for buildings and structures during construction or renovation.
- General Liability Insurance Foundational protection for third-party bodily injury, property damage, and advertising injury claims.