Equipment breakdown insurance
Coverwatch places equipment breakdown for buildings and businesses that run on machinery, from condo HVAC and elevators to commercial refrigeration. We set the spoilage, income, and per-accident limits to match what a real breakdown costs, not a default schedule.
Why Coverwatch
- Markets
- Carriers and specialty equipment breakdown programs that cover aging HVAC, elevators, and switchgear a standard property carrier will not take on.
- Competition
- 60+ carrier partners compared on the per-accident limit and the spoilage and income sublimits, not just the premium.
- Endorsements
- Getting spoilage, off-premises utility, and business income sublimits set high enough that the breakdown claim actually pays.
At a glance
- What it covers
- Sudden internal failure of your machinery or building systems, plus the income and spoiled stock the breakdown causes.
- What it doesn't
- Damage from fire, theft, or weather, and the slow wear and rust that maintenance is meant to catch.
Trusted by 60+ carrier partners
What does equipment breakdown insurance cover?
Equipment breakdown insurance pays to repair or replace machinery and building systems that fail from an internal cause, such as a mechanical breakdown, an electrical arc, a power surge, or a boiler rupture. It fills the gap the standard commercial property policy leaves: the ISO causes-of-loss special form excludes mechanical breakdown and artificially generated electrical current by name. The policy also covers the lost income and spoiled stock the breakdown causes, which often costs more than the repair itself.
How we get you covered
We take equipment breakdown insurance to 60+ carrier partners, build it to fit your business, and keep it compliant.
Read your risk
We map what could actually go wrong in your operation, where a claim would come from, and who would bring it.
Shop 60+ carrier partners
We take your risk to the carriers that know your class and make them compete on price and terms.
Build the endorsements
We add the endorsement wording that decides whether the policy responds to a claim, beyond the base form.
Keep you compliant
We handle the COIs, additional-insured certs, and renewals, so you are never the one chasing paperwork.
Who needs equipment breakdown
The businesses below carry this line as a matter of course. What changes by category is the severity, the exclusions to watch, and the limit you’ll be asked to carry.
Industry
Homeowners associations
Condo and co-op boards insure shared HVAC, boilers, and elevators. Fannie Mae and Freddie Mac require the coverage on financed projects.
Industry
Grocery stores
Refrigeration is the defining exposure. A compressor failure spoils a full store of perishable stock before any repair arrives.
Industry
Restaurants
Walk-in coolers, HVAC, and kitchen equipment fail from the inside. The spoilage and business income sublimits decide whether the claim rebuilds the operation.
What does equipment breakdown insurance cover?
In the policy
Mechanical breakdown of machinery
Equipment breakdown insurance pays to repair or replace a motor, compressor, pump, or engine that seizes or fails from an internal cause.
Electrical breakdown, arcing, and power surge
An arc or short in a transformer, panel, or motor, including damage from an artificially generated electrical current.
Boiler and pressure-vessel failure
Covers a boiler, water heater, or pressure vessel that ruptures, cracks, or bursts from an internal condition.
Business income, extra expense, and spoilage
The income you lose while failed equipment is repaired, the added cost to keep operating.
Not in the policy
Fire, lightning, wind, and theft
The named perils that hit equipment from outside are the property policy's job.
Covered by Commercial Property
Wear, tear, corrosion, and rust
Gradual deterioration and deferred maintenance are wear and tear, not a sudden breakdown.
Covered by your maintenance budget
A defect the manufacturer must fix
A design or manufacturing fault in equipment still under warranty is the maker's obligation.
Covered by manufacturer warranty
What does an equipment breakdown claim look like?
Condo chiller or HVAC compressor burns out
The compressor in a mid-rise's central chiller seizes on a summer weekend.
$40K–$400K
Electrical arc destroys switchgear and motors
An arc fault in the main panel takes out the switchgear and every motor drawing from it.
$25K–$250K
Refrigeration failure spoils a store of stock
A grocery or restaurant compressor fails overnight and a walk-in cooler of perishable inventory is a total loss by morning.
$10K–$150K
Ranges are typical repair, spoilage, and downtime bands for these breakdown types, not a quote. Actual exposure depends on the equipment, its replacement cost, and the sublimits you carry.
How much equipment breakdown coverage do you need?
There is no standard limit. Two numbers decide what you need, the replacement cost of the largest system that can fail and any lender or GSE floor, and you carry whichever is higher.
- Per accident / per breakdown
- $1,000,000+
- Spoilage sublimit
- Set to a full load
The most the policy pays for any single breakdown event, counting the repair and the resulting income and spoilage loss together. One accident is one event, however many objects it damages.
A separate ceiling for perishable stock lost when refrigeration fails. Carriers set this low by default, so verify the number covers a full cold-storage load before you bind.
Endorsements that close the gaps
The base form is the start. These add-ons are where the policy gets built to fit your business.
Business income and extra expense
Restores the income lost and the added cost to keep operating while failed equipment is repaired or replaced.
Spoilage coverage
Pays for perishable stock lost when refrigeration or climate control breaks down.
Equipment breakdown insurance FAQ
Equipment breakdown insurance covers the sudden internal failure of machinery and building systems: a mechanical breakdown, an electrical arc or power surge, or a boiler rupture. It pays to repair or replace the equipment, plus the income you lose and the perishable stock that spoils while it is down. It responds only to internal failure, not to outside perils like fire or theft.
No. The standard ISO causes-of-loss special form (CP 10 30) excludes mechanical breakdown and artificially generated electrical current by name. Your property policy pays when fire, wind, or theft damages equipment from the outside, but not when a motor seizes or a transformer arcs on its own. Equipment breakdown insurance is the coverage that fills exactly that excluded gap, usually added by endorsement.
No. The homeowners endorsement protects a family's own appliances and HVAC. This is the commercial line, insuring a building's central plant, elevators, switchgear, and refrigeration, and paying the business income and spoilage a breakdown causes.
Yes. The standard commercial property form excludes mechanical breakdown and artificially generated electrical current by name. Without the endorsement, any internal failure of your machinery is uninsured. A single chiller failure can run forty to four hundred thousand dollars in repair, spoilage, and lost income. The endorsement premium is a fraction of that.
Equipment breakdown excludes damage from outside forces the property policy already covers, such as fire, lightning, wind, and theft. It also excludes wear and tear, rust, corrosion, and gradual deterioration, because maintenance is meant to catch those. A manufacturer defect still under warranty is the maker's obligation. Running equipment you know is damaged, or damage from flood and earthquake, are also excluded.
Focus on the work.
We'll be your risk team.
Send us your policy and a licensed advisor checks your equipment breakdown against 60+ carrier partners, flagging gaps and overpricing. If your limits already hold up, we'll tell you.
Your quote