COMMERCIAL INSURANCE
Equipment Breakdown Insurance in Texas
Your business depends on equipment that works. When a critical machine, electrical system, HVAC unit or refrigeration system suddenly stops, equipment breakdown insurance can help with certain covered losses.
Equipment breakdown insurance can help address covered losses caused by sudden mechanical or electrical equipment breakdowns.
When Your Business Equipment Stops, Business Doesn’t Always Get to Stop
Modern businesses rely on equipment every day. HVAC systems keep customers and employees comfortable. Refrigeration keeps inventory at the right temperature. Electrical systems keep the lights, computers and machinery running. Specialized equipment may be the heart of the operation.
A sudden equipment failure can create more than a repair bill. Depending on the policy, a breakdown may also lead to damaged property, spoiled inventory, extra expenses or an interruption to normal business operations. Equipment breakdown coverage is designed to address certain covered losses resulting from these unexpected failures.
Texas Department of Insurance identifies boiler and machinery coverage as a commercial coverage option for equipment such as boilers, air conditioning units, compressors, steam cookers and electric water heaters. Coverage varies by policy and insurer.
What Equipment Breakdown Insurance May Help Cover
Mechanical Equipment
Certain covered mechanical equipment can include machinery, compressors, pumps and other essential systems used in business operations.
Electrical Systems
Depending on the policy, covered electrical equipment and systems may be protected against certain sudden and accidental breakdowns.
HVAC & Refrigeration
Heating, ventilation, air-conditioning and refrigeration equipment can be particularly important to restaurants, retailers, warehouses and other businesses.
Computers & Electronic Equipment
Some equipment breakdown policies can address certain covered damage involving computer and electronic equipment.
Spoilage
Businesses that depend on refrigeration may have additional exposure when equipment failure affects perishable inventory. Coverage is subject to the policy.
Business Interruption
Some equipment breakdown coverage can include certain business income or interruption losses resulting from a covered breakdown.
Equipment Breakdown vs. Regular Property Insurance
One important reason businesses consider equipment breakdown coverage is that commercial property insurance and equipment breakdown coverage address different types of risks.
| Coverage | Generally Designed To Address |
|---|---|
| Commercial Property | Covered damage to buildings, contents and other business property. |
| Equipment Breakdown | Certain sudden and accidental mechanical, electrical or equipment breakdown losses. |
| Business Income | Certain income losses and continuing expenses following an eligible covered loss, subject to the policy. |
These coverages can complement one another, but the exact relationship depends on the policy, endorsements, limits, exclusions and covered causes of loss.
Businesses That May Depend on Equipment Breakdown Coverage
Restaurants
Commercial ovens, refrigeration, HVAC and other equipment can be essential to daily operations.
Retail Businesses
Electrical systems, refrigeration, security systems and other equipment may be critical to keeping a store operating.
Manufacturing
Production machinery and electrical systems can play a central role in keeping operations moving.
Property Owners
HVAC, electrical and other building systems can be important for commercial properties and tenants.
Warehouses
Refrigeration, electrical equipment and material-handling systems may be essential to warehouse operations.
Professional Businesses
Computers, communication systems, HVAC and other electronic equipment can be critical to keeping an office productive.
What Happens When Critical Equipment Fails?
Imagine your commercial refrigeration system fails on a Friday afternoon. The repair technician is on the way, but your business still has a problem: the equipment isn’t running, customers are waiting and inventory could be at risk.
Depending on the cause of the breakdown and the coverage purchased, equipment breakdown insurance may help with eligible repair or replacement costs and certain related losses. Some policies may also provide coverage for spoilage, expediting expenses or business interruption.
That’s why equipment breakdown insurance isn’t simply about the machine. It’s about the potential financial impact when an important part of your business suddenly stops working.
Equipment Breakdown Insurance FAQs
What is equipment breakdown insurance?
Equipment breakdown insurance is commercial coverage designed to address certain losses resulting from covered mechanical, electrical or other equipment breakdowns. Depending on the policy, it may address repair or replacement costs and certain related losses.
Is equipment breakdown covered by commercial property insurance?
Not necessarily. Commercial property policies vary, and certain mechanical or electrical breakdown losses may require separate equipment breakdown coverage or an endorsement. Your agent can review your policy to identify potential gaps.
Does equipment breakdown insurance cover HVAC equipment?
HVAC equipment can be eligible under equipment breakdown coverage, depending on the policy and cause of loss. Texas Department of Insurance specifically identifies air-conditioning units among equipment that may be covered by boiler and machinery coverage.
Can equipment breakdown insurance cover lost business income?
Some equipment breakdown policies can provide coverage for certain business interruption or income losses resulting from a covered breakdown. The amount and circumstances of coverage depend on the policy.
Does equipment breakdown insurance cover normal wear and tear?
Equipment breakdown coverage is generally intended for covered sudden and accidental breakdowns rather than ordinary wear and tear or maintenance issues. Specific exclusions vary by policy.
Can equipment breakdown coverage be added to a BOP?
Some insurance companies offer equipment breakdown coverage as an option or endorsement associated with a business owners policy. Your available options depend on the insurance carrier and policy.
Build a Business Insurance Plan Around How Your Business Actually Works
Equipment doesn’t operate in a vacuum. Your business may also need commercial property, business personal property, business income, general liability, cyber insurance or other coverage.
Coverage for eligible commercial buildings and property.
Business Personal Property InsuranceHelp protect eligible equipment, inventory, furniture and other business contents.
Business Income InsuranceCoverage that may help address certain income losses following an eligible covered property loss.
Let’s Make Sure Your Equipment Has a Backup Plan
Your business has enough surprises already. Let’s take a look at the equipment and systems you depend on and discuss insurance options that may fit your business.
Get a Commercial Insurance QuoteInsurance coverage is subject to policy terms, conditions, limits, exclusions and endorsements. Equipment breakdown coverage varies by insurance carrier and policy. This page is for general informational purposes and is not a contract or guarantee of coverage. Please review your policy and speak with your insurance agent about your specific business and coverage needs.