Why Your Business Needs Equipment Breakdown Coverage

If your business’s operations are reliant on expensive or special equipment, then experiencing a breakdown can have serious consequences.  If you do not have money to immediately repair or replace a key piece of equipment, then you will fail to meet deadlines, hurt business relationships, and lose capital.  In some cases, the losses associated with equipment breakdown could even spell the end for your company.  To ensure that this grim reality doesn’t happen to your business, you should secure equipment breakdown insurance.  Here’s what you need to know about this special commercial coverage.

As the name suggests, equipment breakdown insurance offers coverage to repair or replace your company’s equipment if it suffers an electrical or mechanical breakdown, motor burnout, boiler malfunction, and so on.  In addition to repair expenses, equipment breakdown insurance can also cover business income and inventory losses that result from the breakdown.  This type of insurance extends coverage to a wide array of equipment types, such as mechanical, electrical, heating and cooling, and computers and networks.

Many business owners believe that they don’t need equipment breakdown coverage because they already have commercial property insurance in place.  However, it’s important to understand that these two types of coverage are fundamentally different.  While commercial property insurance will offer coverage for your business’s equipment, you can only access this coverage if your equipment is damaged by fire, storm damage, or other covered perils.  In contrast, equipment breakdown insurance offers coverage for the damages caused by issues with the machinery.  A good way to think about it is commercial property insurance handles the damage caused by external threats while equipment breakdown handles the damage caused by internal malfunctions.