Equipment Breakdown Coverage
When the machine fails, BPP won't — this will.
Equipment breakdown coverage pays to repair or replace equipment that fails from mechanical or electrical causes — a burnt-out compressor, a seized motor, a fried circuit board, a short in the electrical panel. Standard Business Personal Property coverage excludes breakdown, so without this coverage, an internal failure is an uninsured loss.
What It Covers
Coverage That Fits Your Property
Equipment breakdown coverage pays to repair or replace equipment that fails from mechanical or electrical causes — a burnt-out compressor, a seized motor, a fried circuit board, a short in the electrical panel. Standard Business Personal Property coverage excludes breakdown, so without this coverage, an internal failure is an uninsured loss.
Modern businesses run on equipment that standard property policies don't protect from the inside: HVAC, refrigeration, computers, servers, production machinery, and electrical systems. Equipment breakdown closes the gap BPP leaves.
Mechanical breakdown
Failure of motors, compressors, pumps, and moving mechanical parts.
Electrical breakdown
Damage from electrical short, arcing, and power surges to covered equipment.
HVAC & refrigeration
Breakdown of air conditioning, heating, and refrigeration equipment.
Computers & servers
Failure of computers, servers, and electronic systems from covered causes.
Production machinery
Breakdown of manufacturing and production equipment.
Spoilage from breakdown
Pairs with spoilage coverage when breakdown ruins perishable goods.
Why BPP alone won't cover a breakdown
Business Personal Property covers equipment for external causes of loss — fire, theft, wind — but excludes mechanical and electrical breakdown. When a walk-in compressor fails and ruins a restaurant's inventory, or a server's power supply fries, BPP doesn't respond. Equipment breakdown coverage is the affordable policy that fills exactly that gap, and for equipment-dependent businesses it's essential.
How equipment breakdown coverage is priced
Equipment breakdown is typically an affordable endorsement or standalone policy — often a few hundred dollars annually for a small business — rated on the value and type of equipment, your industry, and the deductible. Given the cost of a single major equipment failure, breakdown coverage is one of the highest-value additions to a commercial property program.
Common Endorsements & Add-Ons
- Spoilage from breakdown. Covers perishable inventory ruined when refrigeration breaks down.
- Business income from breakdown. Covers lost income when equipment breakdown halts operations.
- Data restoration. Covers the cost to restore data lost in a covered computer breakdown.
- Utility-interruption. Covers equipment and spoilage damage from an off-premises utility failure.
Equipment Breakdown FAQ
Equipment Breakdown — Your Questions
BPP covers equipment for external causes of loss like fire, theft, and wind. Equipment breakdown covers internal mechanical and electrical failures — burnt-out motors, fried circuit boards, seized compressors. Standard BPP excludes breakdown, so the two work together: BPP for outside forces, breakdown for inside failures.
Yes — equipment breakdown covers computers, servers, and electronic systems for mechanical and electrical failure, and can be endorsed to cover the cost of restoring lost data. For data-driven businesses it's an essential complement to BPP.
No — it's typically one of the most affordable additions to a commercial property program, often a few hundred dollars per year for a small business. Given that a single major equipment failure can cost thousands, equipment breakdown is very high value relative to its premium.
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