Property and business income
What is equipment breakdown coverage and what does it pay for? Coverage for sudden mechanical, electrical, or pressure system failures and the damage that follows, which standard property policies generally exclude.
Standard commercial property policies cover external events like fire, wind, and theft. They generally exclude the machine simply failing. Equipment breakdown coverage, the modern descendant of boiler and machinery insurance, fills that hole. It responds to sudden and accidental breakdown of mechanical equipment, electrical systems, pressure vessels, and increasingly the computerized controls attached to all of it.
The payout usually reaches further than the broken part. Depending on how it is written, it can include the resulting damage to surrounding property, the business income lost while the equipment is down, expediting expenses to get a replacement faster, and spoilage of perishable stock when refrigeration fails. That last piece is why a single failed sensor is worth insuring against: the sensor costs almost nothing and the inventory behind it can be worth millions.
If your operation depends on compressors, chillers, HVAC, production machinery, elevators, or anything under pressure, the question is not whether the equipment will eventually fail. It is whether the failure lands on your balance sheet or the carrier's.
Heard on the show. Jessica works through this one in The Silent Killer: How One Broken Sensor Destroyed Millions in Liquid , with the full story and the transcript.
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This page is education, not advice. Policy language varies by carrier, form, and state, so confirm how your own program is written with a licensed insurance professional.
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