Equipment breakdown insurance is one of the primary components of a business owner's policy (BOP), and it protects your company's mechanical, electrical, and computer equipment from unexpected malfunctions.
Equipment breakdown insurance, often known as boiler and machinery insurance or mechanical breakdown insurance, provides coverage for the following:
Even if you don't own your own building, it's a good idea to have equipment breakdown insurance, especially if your firm relies on properly-functioning equipment owned and maintained by a crucial provider, such as a local power company.
If your pizza shop, for example, relies on both online and walk-in clients, your business will suffer if the power goes out due to a power surge. A power outage could result in a loss of heat or air, as well as the inability to process online orders, prepare, cook, serve, and sell meals. Furthermore, if the electricity is off for an extended period of time, your food stockpile may rot.
Damages caused by an external cause, such as a fire, are covered by your commercial property insurance. Damages caused by covered internal forces, such as electrical shorts, mechanical failures, motor burnout, power surges, or operator error, are covered by equipment breakdown insurance.
It's important to note that, while equipment breakdown insurance covers computers, it doesn't cover software. You'll need cyber liability insurance to effectively protect your computer systems, such as software.