What is Equipment Breakdown Coverage?

If your business relies heavily on equipment, a simple breakdown can trigger a financial loss that can push your business to collapse. So, if you rely on kitchen appliances, electrical, mechanical, or computer systems, you need a risk management plan against unforeseen events.

Fortunately, businesses can insure their equipment against unexpected damage using equipment breakdown coverage. The insurance cover shields the company from diverting vital cash flow to repairs, replacement, and other related expenses.

If you’re looking to protect your business from equipment breakdown-related losses, consider speaking to a trusted business property insurance provider.

Here’s what you need to know.

What Is Equipment Breakdown Coverage?

It is a type of commercial insurance that provides funds for replacing or repairing damaged equipment or machinery that has suffered a technical or electrical failure. It protects the company’s computers, electrical systems, and production machinery from accidental or sudden malfunction.

Equipment breakdown coverage often needs to be clarified with commercial property insurance. Commercial property insurance protects owned or leased equipment of property from damage caused by external factors. 

These external causes of damage may include fire, storms, burglary, or vandalism. On the contrary, equipment breakdown coverage protects losses related to equipment damage if it stops working because of an internal malfunction.

What Type of Equipment is Covered by Equipment Breakdown Coverage

Equipment breakdown coverage protects different types of equipment, including:

• Security Systems
• Heating, Ventilation, and Air condition Systems
• Milling Machines
• Quality testing machines
• Refrigeration appliances
• Computer systems
• Escalators and elevators
• Point-of-sale hardware
• Barcode scanners

Benefits of Equipment Breakdown Coverage

Provides Financial Cushion to Repair or Replace Damaged Equipment

A mechanical breakdown can occur when it’s least expected. If uninsured, the cost of repair or replacement can put a dent in your finances or force you to take a loan. Instead of diverting your business cash flows, the coverage injects some cash to cover the unexpected expense.

It Covers Lost Income

If you run a mini-bakery and a mechanical breakdown causes your oven to fail, it would be impossible to produce bread or cake. The equipment breakdown coverage can cover the lost income until you can return to business as usual. It can also cover lost inventory costs, e.g., half-baked bread that you can’t sell.

Offers Peace of Mind

Most electronic and mechanical systems are sensitive to electrical defects like power shorts and surges. In addition, most electrical, computer, and electrical systems work in unison so that a minor glitch can cause a massive chain reaction. If you’re insured, you enjoy financial protection and peace of mind.

Protect Your Investment With Equipment Breakdown Coverage

If you’re in the laundry business and a dryer fails to work, you will lose tangible income and disappoint your customers. If you cannot fix the defect promptly, you will lack the finances to pay salaries, rent, and other obligations.

With that in mind, your vital machinery and equipment deserve protection from unforeseen events using equipment breakdown coverage.

At Panorama Insurance Agency, we work with multiple insurers to give you a tailored insurance package for your business.

Contact us online or call us at 818.514.1916 to request a free quote.