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What is equipment breakdown coverage?

A printer in a corporate building

An important form of insurance coverage as a business owner is equipment breakdown coverage, which can help pay for the costs of repairing or replacing damaged equipment. When added to a homeowners insurance policy, however, equipment breakdown coverage also covers damage to household systems, electronics and appliances that is caused by electrical or mechanical failure. Learn more about the benefits of equipment breakdown coverage and how it is an affordable way to fill gaps in your home insurance coverage. 

What Equipment Breakdown Insurance Covers

An optional part of a business insurance policy, equipment breakdown coverage can help pay for the costs of repairing or replacing damaged equipment after a covered incident. There are five categories of equipment that this type of coverage typically covers:

  • Mechanical
  • Electrical
  • Computers and communications
  • Air conditioners and refrigeration systems
  • Boilers and pressure equipment

As a result of equipment breakdowns, equipment breakdown insurance often pays for:

  • The cost to repair or replace damaged equipment, including time and labor
  • Lost income
  • Spoiled inventory
  • Necessary expenses incurred while equipment is being repaired or replaced

When added to a homeowners insurance policy, equipment breakdown coverage typically covers:

  • Mechanical breakdown
  • Electrical breakdown
  • Pressure systems breakdown
  • Breakdown due to improper installation

What Equipment Breakdown Coverage Doesn’t Cover

Equipment breakdown coverage won’t cover damage that’s a resulted from lack of maintenance, such as:

  • Wear and tear
  • Rust
  • Mold
  • Pest damage

Commercial Property Insurance vs. Equipment Breakdown Insurance

Commercial property insurance can often be compared to equipment breakdown insurance, as they both can provide coverage for business owners, but they both provide different types of coverage. Commercial property insurance covers external threats, such as a fire. Equipment breakdown insurance covers damage caused by internal forces, such as electrical shorts, mechanical breakdowns, power surges, operator error or motor burnout. 

Have questions about equipment breakdown coverage? SelectQuote can Help.

Home insurance and equipment breakdown coverage can safeguard your home, business and possessions if damage or loss occurs, and making sure you have sufficient coverage is an easy way to gain peace of mind. At SelectQuote, we’ll take the time to listen to what you need covered, making sure you have the right coverage to protect you, your home and your business.

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