Glossary

Equipment breakdown

Coverage for sudden damage to mechanical, electrical and pressure equipment such as HVAC units and boilers, plus the spoilage and income losses that follow.

Also called: boiler and machinery, equipment breakdown insurance, mechanical breakdown coverage, electrical breakdown

Equipment breakdown covers the failure of the machines a business runs on: a compressor burns out, a boiler cracks, a power surge destroys a control panel. It was long called boiler and machinery, and it exists because standard property forms leave the exposure out. The ISO special causes of loss form (CP 10 30) excludes mechanical breakdown, including rupture or bursting caused by centrifugal force, artificially generated electrical energy that damages electrical equipment, and explosion of steam boilers, steam pipes and steam turbines.

Coverage typically pays for damage to the equipment itself and for the consequences: spoiled refrigerated stock, business income and extra expense, and expediting costs to speed repairs. Some property policies include a limited equipment breakdown extension, while others sell it as an endorsement or a stand-alone policy, and insurers in this line often handle boiler and pressure vessel inspections too. See HSB, the best-known specialist.

The pitfall is the cause of loss. The coverage is for sudden and accidental breakdown, so wear and tear, corrosion and gradual deterioration are not covered. Restaurants, medical offices and cold-storage operators should check the spoilage and income sublimits against what a failure would actually cost.

equipment breakdown insurance: what it covers that property insurance does not explains the coverage and its limits, and spoilage coverage covers the refrigeration loss.

Last reviewed October 10, 2026

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Related terms

Spoilage coverage Property coverage for perishable stock that spoils when temperature or humidity changes after equipment breakdown, refrigerant contamination or a power outage. Business income Property coverage that replaces net income and continuing operating expenses, including payroll, while a covered physical loss suspends operations. Extra expense Property coverage for the added costs of staying open after a covered loss, such as a temporary location, rented equipment or overtime. Special form (open perils) A property causes-of-loss form covering direct physical loss from any cause not specifically excluded or limited, rather than only the perils it lists. Utility service interruption Property endorsements covering loss when power, water, gas or communications to your premises are cut off by damage at an off-premises utility facility.

Related guides

Equipment breakdown insurance: what it covers that property insurance does not Equipment breakdown insurance pays for sudden mechanical and electrical failure that property policies exclude, plus spoilage and lost income. What it covers. Fire and water damage prevention for commercial buildings Fire costs more per claim, water damage is more frequent. The controls insurers look for, what the property form says, and the protective safeguards condition. IoT sensors and commercial property insurance How water, freeze, fire and equipment sensors fit with commercial property insurance, what carriers offer for them, and how they help underwriting and claims. Spoilage coverage for refrigeration breakdown and power outage Standard property forms exclude spoilage from temperature change and off-premises power loss. How CP 04 40 and equipment breakdown fill the gap. Physical damage coverage for trucks and trailers How truck and trailer physical damage pays: comprehensive, collision, ACV vs stated or agreed value, trailer interchange and what the form excludes. Utility service interruption coverage: when an outage is insured The ISO special form excludes off-premises power, water and telecom failures. How the utility services endorsements buy coverage back and where they stop.

Related insurers

AXA XL AXA's commercial and specialty division, built on XL Group (bought 2018); writes liability, excess, property and specialty lines for mid-size and large firms. Brotherhood Mutual Fort Wayne insurer for churches, Christian schools, colleges, camps and mission groups since 1917. Rated B++ by AM Best after a 2024 downgrade. Cincinnati Insurance Ohio insurer sold only through independent agents in 46 states; known for three-year commercial packages, local field claims staff and its own E&S company. Farm Bureau Financial Services Iowa-based Farm Bureau insurer and the largest U.S. farmowners writer, selling farm, ranch and small-business coverage in eight states through exclusive agents. FM Policyholder-owned property insurer (formerly FM Global) for large and midsize companies, known for engineering-led loss prevention and member credits. Fortegra Jacksonville specialty insurer writing E&S and admitted programs through MGAs plus warranty and credit protection; owned by Korea's DB Insurance since May 2026.

Related industries

Auto repair shop insurance What repair shops and body shops need: garage liability, garagekeepers for customers' cars, property, pollution, workers' comp and tools. Bakery insurance Insurance for retail and wholesale bakeries: GL and product liability for allergens, oven and mixer breakdown, spoilage, delivery vehicles and workers' comp. Brewery, winery and distillery insurance Insurance for craft breweries, wineries and distilleries: product liability and recall, taproom liquor liability, stock and spoilage, fire, and federal bonds. Coffee shop insurance What coffee shops and cafes need: GL with hot-beverage claims, property and equipment breakdown, spoilage, comp, and roasting or wholesale add-ons. Convenience store and gas station insurance Robbery, fuel and tank pollution, alcohol and tobacco sales, spoilage and late hours drive convenience store and gas station insurance. Food and beverage manufacturer insurance What food and beverage makers need: products liability, contamination and recall cover, spoilage and breakdown, FSMA preventive controls, retailer limits.

Related en español

Cobertura de deterioro de perecederos por falla de refrigeración y apagones Las pólizas de propiedad estándar excluyen el deterioro por cambio de temperatura y apagones externos. Cómo el CP 04 40 y la avería de equipo cubren el hueco.