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Frequently Asked Questions(FAQ)

Is equipment breakdown coverage the same as boiler and machinery insurance?
Equipment breakdown coverage was once known as boiler and machinery coverage, and is quickly replacing this coverage at most major insurers. Although they are separate policies in some instances. The new name - equipment breakdown - came to be because the coverage encompasses more equipment than it once did, including recent technology.
How much does breakdown insurance cost?

The exact amount you’ll pay as a business depends on the extent of your policy and the type of equipment you’re insuring. Additionally, insurance companies take into consideration many other factors including any discounts and personal and financial information.

$800/year or about $67/month seems to be the average, though. If you choose to bundle this insurance coverage with others at the same company, you may qualify for a discount, effectively lowering the price of the equipment breakdown coverage.

Doesn’t commercial property Insurance cover this?
There are many types of policies and riders you can add to basic insurance coverage that offers a broader range of coverage. Commercial property and equipment breakdown coverage are two separate policies. Commercial property coverage will cover your property in the event of natural causes like flooding, fires, or tree damage, Equipment coverage, on the other hand, will cover your equipment or loss of income in the event of accidental electrical or mechanical issues. Many business owners choose to purchase both policies to ensure complete coverage.

Final Word

Equipment breakdown insurance is a worthwhile investment for many small businesses and is a relatively affordable addition to a basic business insurance policy. It’s best to pair it with other insurance types like commercial property coverage, in order to have a comprehensive policy. Many major insurers offer this coverage, so check in with your current agent, if you have one.

Visit our other article to find out more about equipment loans for new businesses and choose the right option for you. 

About the Authors

Christopher Murray

Written by: Christopher Murray

Personal Finance Expert

Christopher Murray is a professional personal finance and sustainability writer and editor who enjoys writing about everything from budgeting and saving to unique investing options like SRI and cryptocurrency.

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Kal Salem

Fact checked by: Kal Salem

CPA, PMP and Finance Consultant

A CPA and finance professional working with small businesses to educate owners and grow alongside their businesses. He holds a Masters in Accounting and a BS in Supply Chain Management. Owner at Salem CPA Services LLC.

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