Equipment Breakdown Insurance

Tell us when equipment arrives, not at renewal. New production machinery, a replacement chiller, a second walk-in, or an added transformer all change what is at risk, and some programs schedule specific units rather than covering everything blanket. Review the business income and spoilage limits at the same time, since those are usually the numbers that fall behind. Ask what the deductible is on the largest single unit, because a percentage deductible on a major machine behaves very differently from a flat one.

More than boilers, which is where the coverage came from. Modern forms reach electrical systems and transformers, HVAC and refrigeration, air compressors, pumps, elevators, production machinery, and in many programs computers, telephone systems, and controls. Boilers and pressure vessels bring one extra thing with them. California requires permits and periodic inspection of pressure vessels, and insurers with certified inspectors commonly perform those inspections as part of the coverage, which is a service as much as an indemnity.

Yes, through expediting expense, which is often the most useful part of the form. Expediting expense funds the extra cost of speeding a repair: overtime, express freight for a part, and temporary rental equipment while the permanent unit is rebuilt. It sits alongside business income and extra expense, and on refrigeration or production equipment it usually matters more than the repair cost itself. Spoilage is separate again, responding when a covered breakdown ruins product. Each carries its own limit.

A sudden physical failure from a mechanical, electrical, or pressure cause. Typical triggers are an electrical arc or short in a panel or transformer, a motor or compressor seizing, or a pressure vessel rupturing. A control system failing in a way that damages the equipment itself counts too. The distinction that matters is that the equipment must damage itself. A machine ruined by a sprinkler leak is a property claim. The same machine ruined when its own windings burn out is an equipment breakdown claim.

Anything gradual, and anything already covered by the property form. Wear, corrosion, erosion, and deferred maintenance are excluded, because the coverage is for sudden and accidental breakdown rather than for the condition that led to it. Fire, wind, flood, and earthquake are property perils and do not belong here. Equipment already failing when the policy incepts is outside it. Testing damage and damage during installation are treated differently by different forms, so ask before a commissioning date.