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⚙️ '''Equipment breakdown insurance''' — historically known as boiler and machinery insurance — covers the cost of repairing or replacing mechanical, electrical, and pressure equipment that fails due to sudden and accidental breakdown, along with resulting [[Definition:Business interruption insurance | business interruption]] losses, spoilage, and extra expenses. Unlike a standard [[Definition:Commercial property insurance | commercial property]] policy, which typically excludes losses caused by internal mechanical or electrical failure, equipment breakdown insurance specifically addresses the gap left by that exclusion. It protects a wide range of assets including boilers, HVAC systems, transformers, production machinery, computer servers, and increasingly the sophisticated technology infrastructure that modern [[Definition:Insurance carrier | insurers]] themselves depend on.

🔧 When covered equipment experiences an insured breakdown — such as an electrical arcing event in a transformer or a compressor motor burnout — the policy responds by paying for the physical damage to the equipment, the cost of temporary repairs or rental replacements, lost income during the downtime period, and, where applicable, the value of perishable goods that spoiled as a result. [[Definition:Underwriting | Underwriters]] assess risk by reviewing equipment age, maintenance records, inspection histories, and the insured's overall [[Definition:Risk management | risk management]] practices. Many equipment breakdown programs bundle regular inspections by jurisdictional engineers, fulfilling state and local code requirements for pressure vessels and elevators while simultaneously providing the insurer with current information on the condition of insured assets.

💡 Businesses that rely on continuous operations — hospitals, data centers, manufacturers, and cold-storage facilities — face outsized exposure to equipment failure. A single boiler explosion or electrical fault can halt production for weeks and generate losses far exceeding the repair cost. Equipment breakdown insurance converts that volatile, potentially catastrophic risk into a manageable [[Definition:Premium | premium]] expense. For [[Definition:Insurance broker | brokers]] advising commercial clients, ensuring this coverage is properly coordinated with the client's property policy prevents disputes over whether a loss stems from an external peril (covered by property) or an internal malfunction (covered by equipment breakdown).

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Commercial property insurance]]
* [[Definition:Business interruption insurance]]
* [[Definition:Boiler and machinery insurance]]
* [[Definition:Inland marine insurance]]
* [[Definition:Loss control]]
* [[Definition:Risk management]]
{{Div col end}}

Definition:Equipment breakdown insurance - Revision history

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