Equipment Breakdown: Protect What Powers Your Home or Business
July 22, 2025
What Is Equipment Breakdown Coverage?
Modern homes and businesses rely heavily on equipment to run smoothly, from commercial HVAC system, a restaurant refrigerator, or the washer and dryer in your laundry room. Unfortunately, when these essential systems or appliances suddenly break down, due to mechanical or electrical failure, the costs can add up quickly.
That’s where equipment breakdown insurance comes in. This often-overlooked coverage can help bridge the gap in protection left by standard property or homeowners insurance policies, offering a cost-effective safety net when things stop working unexpectedly.
Equipment breakdown coverage is a type of insurance that helps pay for the repair or replacement of major systems and appliances that fail due to sudden, accidental mechanical or electrical breakdown. Please note, this does not include malfunctions due to wear and tear, poor maintenance, or external disasters like fire or storms.
While it’s known as an endorsement on a homeowners policy for individuals, it’s often referred to as equipment breakdown or boiler and machinery insurance for commercial properties.
For Business Owners: Why Equipment Breakdown Insurance Matters
Most businesses rely on critical equipment to generate revenue and maintain operations. Whether it’s heating and cooling systems, refrigeration units, production lines, or point-of-sale systems, a failure can create major disruptions.
What Can Go Wrong?
Some common causes of breakdown include:
- Power surges and electrical arcing
- Overheating or mechanical failure
- Breakdowns in interconnected systems
- Delayed parts due to supply chain issues
These problems can cause more than just repair bills. They can halt your operations, cause spoilage or loss of perishable inventory, and ultimately lead to lost income.
What’s Covered?
Depending on your policy, business equipment breakdown coverage may include:
- Property Damage: Repairs or replacement of covered equipment
- Business Interruption: Helps recover lost income and pay for temporary solutions
- Spoilage: Protects temperature-sensitive inventory
- Off-Premises Equipment: Covers portable or mobile equipment
- Service Interruption: Covers losses from third-party utility failures
- Data Restoration: Helps restore electronic data after breakdown
- Hazardous Cleanup: Covers contamination from equipment failure
- Ordinance or Law: Helps comply with updated codes during repairs
Real-World Business Claims:
- A power surge damages a restaurant freezer, causing $40,000 in food spoilage and repair costs
- A server failure halts operations at a consulting firm for several days, leading to missed deadlines
- A boiler crack leaves a retail location without heat, requiring temporary fixes during peak season
Risk Management Tip:
If your equipment has gotten more complex or your operations have expanded, it may be time to review your policy with your Robertson Ryan Insurance Agent to make sure you’re covered where it counts.
For Homeowners: What This Coverage Can Do for You
Standard homeowners policies don’t typically cover sudden breakdowns of home appliances or major systems. Equipment breakdown coverage is an optional endorsement that helps fill this gap.
What’s Typically Covered?
Coverage varies, but most policies include:
- HVAC systems and furnaces
- Kitchen appliances (refrigerators, ovens, dishwashers, etc.)
- Washers and dryers
- Electrical panels and home wiring
- Smart home technology and security systems
- Sump pumps and water filtration systems
- Televisions, computers, and fitness equipment
Some endorsements even include food spoilage reimbursement and temporary housing expenses.
Common Homeowner Claims:
- A power surge destroys a smart TV and entertainment system
- A water heater cracks and floods part of the basement
- A refrigerator motor fails, causing food spoilage
- The HVAC system goes out during a heat wave
What’s Not Covered?
It’s important to understand what isn’t included:
- Normal wear and tear
- Lack of maintenance
- Rust, corrosion, mold, or pest damage
- Damage already covered by your standard homeowners policy (like fire or flood)
- Software issues or personal data loss
Equipment Breakdown Coverage vs. Home Warranty: What’s the Difference?
| Feature | Equipment Breakdown Coverage | Home Warranty |
| How It’s Purchased | Add-on to your homeowners insurance | Standalone contract with a warranty provider |
| What It Covers | Broad range of systems/appliances for electrical/mechanical failure | Specific items listed in the warranty |
| Cost | Typically $25–$50/year | Can range from $300–$1,000/year |
| Deductible/Service Fee | Typically $250–$500 per claim | $50–$100 per service visit |
| Contract Flexibility | Tied to your home insurance policy | Separate contract, often with term limits |
| Choice of Contractor | Often more flexibility | Contractor usually assigned by warranty provider |
Both options can be helpful depending on your needs, but equipment breakdown coverage often offers a more affordable and integrated solution with your existing homeowners policy.
Final Thoughts: Why Equipment Breakdown Coverage Matters
Breakdowns can be sudden, stressful, and expensive. Equipment breakdown insurance helps reduce the financial impact and restore your peace of mind.
For businesses, it’s about continuity and protection from operational disruptions.
For homeowners, it’s about safeguarding the appliances and systems you rely on every day.
Before the unexpected happens, take time to:
- Review your current policy
- Consider your equipment’s age and importance
- Talk with your Robertson Ryan Insurance Agent to explore the best fit
Have Questions? We’re Here to Help.
Whether you’re a business owner reviewing your commercial policy or a homeowner considering additional protection, our team can help you find equipment breakdown coverage tailored to your needs. Let’s make sure you’re covered, before something breaks down!
Contact Robertson Ryan Insurance Agent or find one to quote you here.
*Please note that we rely on independent sources, and recommend conducting further research or to seek guidance from a qualified industry professional, legal counsel, or licensed insurance.