What Is Equipment Breakdown Coverage?

Equipment breakdown coverage is an essential business insurance that covers damages to your company’s equipment if there’s an unexpected breakdown. It can help protect your mechanical, computer, and electrical systems, as well as appliances.

At Westfield, you can add equipment breakdown coverage to your commercial property insurance or business owners policy (BOP).

What Does Equipment Breakdown Insurance Cover?

Equipment breakdown coverage can include the equipment you use every day, from generators and boilers to computers and printers. This coverage helps protect your equipment when it stops working due to a mechanical or electrical issue, like a motor burnout or power surge.

Generally speaking, equipment breakdown insurance covers the following*:

• Costs of direct physical damage to equipment caused by mechanical failure or electrical breakdown.
• Business income or spoilage losses due to equipment breakdown and extra expenses incurred to minimize loss.
• Losses caused by short circuit, electrical arcing, power surges, mechanical breakdown, motor burnout, boiler damage, operator error, and mobile equipment or technology breakdown, even if your equipment is off premises.
• Losses caused by microelectronic failure, even if physical damage is not detectable or non-physical damage, such as a software failure that results in a breakdown.
• Expenses incurred for data research, repair and restoration services, and lost income when your cloud service provider has an outage due to an equipment breakdown.
• Costs for restoring your data that’s lost or damaged due to a breakdown of covered equipment owned by you or your service provider.
• Costs for public relations services to manage reputation damage when a breakdown causes a business income loss.
• Costs to repair or replace covered property contaminated by fungus, wet rot, dry rot, bacteria, or hazardous substances released due to a breakdown.
• Additional costs up to 150% of the original loss for upgrades to equipment that’s more energy efficient and environmentally friendly.

What Does Equipment Breakdown Insurance Not Cover?

Equipment breakdown insurance does not cover damages caused by external forces like fire, wind, or hail, as your commercial property insurance should cover those scenarios. Additionally, equipment breakdown insurance does not cover normal wear and tear or intentional damage.