Equipment Breakdown Coverage in Massachusetts

WHAT IS IT? WHO NEEDS IT? COVERAGES OFFERED

Equipment breakdown coverage is specialized commercial property coverage for essential equipment. Instead of protecting against fire, wind, theft, vandalism and similar perils, this coverage usually only provides protection against malfunction.

Apartment Complexes, which need furnaces, air conditioners and water heaters to work
Breweries, which are need tanks for brewing and fermenting beer
Coffee Roasters, which need a roaster to roast green coffee beans

Operator error
Mechanical malfunction
Electrical arcing

What is Equipment Breakdown Coverage?

Commercial property insurance policies that protect equipment against damage and theft are widely available in most cases. Sometimes businesses need other protection for their equipment, though. For Massachusetts businesses that rely on essential equipment, equipment breakdown coverage generally extends protection to breakdowns and malfunctions.

What Massachusetts Businesses Should Carry Equipment Breakdown Insurance?

Any Massachusetts business that relies on essential equipment and wouldn’t be able to operate without the equipment might want to consider this coverage. For example, the coverage may be appropriate for the following businesses:

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Apartment Complexes, which need furnaces, air conditioners and water heaters to work
Breweries, which are need tanks for brewing and fermenting beer
Coffee Roasters, which need a roaster to roast green coffee beans
Manufacturers, which may need specialty machinery in order to produce goods
Restaurants, which need ovens, stoves, refrigerators and freezers for food prep and food storage
Retailers, which need point-of-sale (POS) systems to process customer purchases
Warehouses, which may need special equipment for managing inventory

There are still many more businesses that could benefit from equipment breakdown insurance.

Any business that’s not sure whether this coverage makes sense for them can talk with an insurance agent who knows equipment breakdown insurance well. A specialized agent will be able to review a business’ equipment and make an informed recommendation regarding coverage.

What Kinds of Malfunctions Are Covered by Equipment Breakdown Insurance?

Allowing for variances among specific policy language, most equipment breakdown insurance policies extend coverage to a variety of potential malfunctions. Depending upon its terms, a policy might cover breakdowns caused by:

Operator error
Mechanical malfunction
Electrical arcing
Power surge
Explosion

How Are Equipment Breakdown, and Boiler and Machinery Insurance Different?

Boiler and machinery insurance policies are often similar to equipment breakdown insurance policies, and the two generally have the same purpose of protecting against malfunction. The two insurances aren’t quite identical, however.

Compared to boiler and machinery policies, equipment breakdown policies typically have broader language that allows them to cover more diverse equipment. Boiler and machinery policies have historically only insured boilers and industrial machinery, and many still limit their coverages to these items. Equipment breakdown policies might cover HVAC equipment, food processing equipment, POS systems and many other kinds of equipment.

Because they’re often able to cover more diverse equipment, equipment breakdown insurance policies frequently also have more detailed coverage stipulations. The extra detail helps precisely identify what equipment is covered and what’s not covered.

Can Businesses Combine Equipment Breakdown Insurance With Other Coverages?

Equipment breakdown insurance can be purchased on its own, but it’s also widely available through package policies. A variety of commercial package policies readily offer the coverage, and some more basic business owners' policies might too.

Purchasing the coverage through a package policy frequently nets businesses a premium discount. Since most businesses need other insurance coverages too, package policies tend to be an obvious choice. Many businesses that have expensive and essential equipment end up purchasing a commercial package policy that has equipment breakdown within it.

How Can Massachusetts Businesses Get Equipment Breakdown Coverage?

For help insuring essential equipment against malfunction, contact the independent insurance agents at Paul T. Murphy Insurance. Our Massachusetts agents will help you find the equipment breakdown coverage that your business needs, and we can assist with many other commercial insurances too. With our assistance, you can have confidence that your business’ equipment and the business itself are well protected.

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This material is for informational purposes only. All statements herein are subject to the provisions, exclusions and conditions of the applicable policy, state and federal laws. For an actual description of coverage, terms and conditions, please refer to the applicable insurance policy or check with your insurance professional. The illustrations, instructions and principles contained in the material are general in scope and, to the best of our knowledge, current at the time of publication.