Equipment Breakdown Coverage: What You Need To Know

Equipment Breakdown Coverage

Do you have several types of expensive equipment in your house or your commercial building that losing or breaking them would also break the bank? I say worry no more because equipment breakdown coverage has got you, well, covered. 

Today, let’s talk about equipment insurance and what it exactly covers. 

Also, I will answer a few essential questions, such as whether or not you should get a piece of equipment insured even though you don’t own it, or does your commercial property insurance cover any equipment breakdown, and how much would it cost you to buy a business equipment insurance. 

Let’s get started. 

(image alt text: a laser cutting machine insured under equipment breakdown coverage)

What is Equipment Breakdown Coverage?

Equipment breakdown coverage is a form of insurance or financial protection from any sudden breakdown of a home or office equipment due to electrical, mechanical, and other covered incidents that cause the insured apparatus to malfunction.

If your home appliances or essential office machinery stop functioning, your equipment insurance will cover the expenses needed to repair or replace each piece of insured equipment. 

The financial assistance can also extend to loss of wage or business income, primarily if the machine that breaks down serves as the main income generator of your business. For this, however, you need to have commercial equipment insurance. 

What Does Equipment Breakdown Insurance Cover?

Like any other insurance policy, your equipment insurance can cover a variety of different things, such as the following: 

Home Appliances 

Home appliances are usually included in your homeowner’s insurance policy if you have one—the coverage typically includes damage by fire or storm. 

However, if you need to protect yourself from sudden out-of-pocket expenses when an expensive appliance breaks down, you need to have equipment breakdown coverage—the home appliances that are generally covered are the following: 

  • Television sets 
  • Washers and dryers 
  • Garbage disposals 
  • Microwaves and ovens 
  • Freezers and refrigerators 
  • Food spoilage from freezer and refrigerators breakdown 
  • Home gym apparatus (e.g., treadmill)
  • Home security systems 
  • Home entertainment systems 
  • Heating and air conditioning systems 
  • Computers 
  • Well water pumps 
  • Water heaters 
  • Jacuzzis 
  • Riding lawn mowers 
  • Electrical power panels 

Remember that there are still a lot of home appliances you can get covered under equipment insurance that are not listed above. So consult with your insurance company and let them know if you have specific pieces of equipment that you want to insure. 

(image alt text: home appliances covered by equipment insurance)

Business Machinery 

To make sure that your business does not get the toll off machines breaking down unexpectedly, it’s highly recommended that you invest in commercial equipment insurance. 

Business machinery typically covered would be: 

  • Data restoration systems and company computers 
  • Phone systems and voice mail systems 
  • Printers and photocopiers 
  • Boilers, furnaces, and other pressure equipment  
  • Back-up generators 
  • Sump pumps and water pumps 
  • Electrical systems (e.g., cables, transformers, and electrical panels)
  • Surround sound systems 
  • Production machinery (e.g., waterjet cutting machine)
  • Machine motors and engines 
  • Elevators and escalators 
  • Security systems and fire alarms 
  • Retail point-of-sale devices 
  • Heating, Ventilation, and Air Conditioning (HVAC) systems 
  • And other specialized production and manufacturing pieces of equipment 

If you have other business machines that are not mentioned in the list, but definitely need to get insured, talk to a commercial equipment insurance provider to ensure coverage.

(image alt text: business machinery covered by business equipment insurance)

Situational Expenses  

Situational expenses are the kinds of costs that you have to deal with after an appliance or business equipment breaks down. Depending on the type of equipment insurance you get, here’s a list of the expenses that are generally covered under equipment breakdown insurance: 

  • Cost of repairs already made 
  • Necessary expenses incurred while equipment is being repaired or replaced 
  • Total cost to repair or replace your damaged equipment as well as labor and time 
  • Entire cost of income lost as the machine breaks down 
  • Cost to replace spoiled inventory 
  • Liability costs to property damage as the equipment malfunctions 
  • Cost of mandatory equipment inspections, especially in a commercial building
  • Prices demanded by bodily injuries sustained from the damaged equipment 
  • Costs needed to repair damaged properties due to the malfunctioning apparatus  
  • Additional regular charges due to a covered occurrence 

Once again, it is highly recommended that you consult a reliable home appliance and business equipment insurance provider to know exactly what expenses you are covered with besides the costs of repairing or replacing your devices. 

(image alt text: calculation for home appliance and commercial equipment insurance)

Common Occurrences that Destroy Your Equipment 

Now that you know the typical home appliances, business machines, and expenses that are covered by most equipment insurance policies, let’s go over the common occurrences typically accepted when making your equipment breakdown coverage claims: 

  • Any mechanical breakdown as well as bursts and ruptures due to a centrifugal force 
  • Sudden machine failures due to incorrect installation processes 
  • Malfunctions caused by pressure systems breaking down (e.g., loss of vacuum or air pressure) 
  • Electric arcing, short circuits, power outage, and power surges
  • And a lot of other occurrences that your homeowner’s insurance and commercial property insurance may not cover. 

Remember: there are also common occurrences that your equipment insurance will not cover, such as equipment wear and tear as well as neglect. 

It’s best to speak to someone from a trusted equipment insurance company so that you can go over the common occurrences that can affect your devices inside your residence or commercial property—to make sure if they covered incidents or not.

(image alt text: short circuit causing equipment damage - covered by equipment breakdown insurance policy)

I Don’t Own the Equipment, Should I Still Get Equipment Breakdown Insurance?

It is highly recommended that you do. 

You see, most business owners think that since they do not own the equipment, investing in equipment insurance coverage for a leased commercial machine is not really necessary. Until an accident happens, the machine breaks down, and they lose a substantial amount of productivity, customers, and revenue. 

Now, you might say that your lessor has got it covered already because they bought a leased equipment insurance policy.

But the truth is: leased equipment insurance only protects the lessor’s finances and not the lessee’s. So, if something unfortunate happens, they will get the money from their insurance company; you, on the other hand, will have to pay them. And worse, no one pays you for any damages. 

So, if you are leasing a machine that brings a significant amount of productivity and revenue to your business, consider getting commercial equipment insurance for it. 

Does Commercial Property Insurance Cover Equipment Breakdown?

Unfortunately not. 

There may be commercial property insurance policies that might cover your industrial equipment, but the warranties are limited, such as only covering brand new business machines for a short time span. 

Also, they do not cover loss of income caused by damaged devices. Isn’t this one of the biggest reasons why equipment breakdown insurance policies are great for businesses?  

How Much Equipment Breakdown Insurance Should I Buy?

Typically, equipment insurance costs around $25 to $50 per year for coverage worth $50,000. I recommend that you check with your insurance company and get a personalized quote.  

The costs of getting equipment breakdown insurance policy can be nothing compared to the peace of mind and financial protection it provides for your home and business equipment, especially from sudden out-of-pocket expenses, spoiled food and beverages, and loss of income. 

So, what are you waiting for? Get a personalized quote today to see how much equipment damage coverage you need to buy for your devices inside your house and commercial space. 

Breaking Down Equipment Breakdown Insurance

  • Equipment breakdown insurance coverage is another form of financial protection for any sudden expenses that may occur due to a machine malfunction in your residence or commercial building. 
  • Equipment insurance generally covers home appliances, business machinery, situational expenses that may arise when a machine breaks down, and unfortunate events that cause a piece of equipment to malfunction (e.g., power surge). 
  • It is best to get your leased equipment insured, rather than depend on your lessor’s leased equipment insurance policy. 
  • Investing in an equipment insurance policy is nothing compared to the peace of mind and financial protection you get from your insurance provider.
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