Blog Mechanical Breakdown Coverage

Mechanical Breakdown Coverage

Written by Joe Weipert—Senior Vice President April Yearby—Vice President, Agency Co-Owner

December 18, 2020 · Commercial Lines

Mechanical breakdown coverage can help you cover the cost of repairs and losses caused when mechanical systems malfunction.

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Equipment breakdown coverage, also known as mechanical breakdown coverage, is precisely what the name suggests. This policy is designed to protect your company's computers, printers, photocopiers, electrical systems, and mechanical equipment from malfunctions and accidental breakdowns. The coverage should pay for losses suffered because of the breakdown. For instance, if your servers malfunction and clients lose money because of the downtime, the coverage will protect your business in the face of a lawsuit arising from the incident.

What Is Mechanical Breakdown Coverage?

Mechanical breakdown coverage pays for various losses caused by business equipment breakdowns. A short circuit or loss of air pressure vacuum can result in HVAC failures, equipment malfunction and other breakdowns, causing inconveniences to those relying on the system. The coverage is designed to pay for specific breakdowns but mostly protects the following:

  • Computers, laptops, and telephone equipment
  • Manufacturing equipment
  • Refrigeration machines and devices
  • HVAC systems
  • Mechanical systems and their components
  • Retail POS devices
  • Security and surveillance systems
  • Escalators and elevators

Mechanical breakdown coverage kicks in following equipment malfunctions and doesn’t cover breakdowns caused by other covered causes. For instance, if your systems break down because of a fire, the property insurance policy should pay for damages arising from that event. Mechanical breakdown insurance is a coverage that replaces traditional boiler and machinery policies introduced when steam boilers were the main source of power. It covers the above mechanical systems, most of which rely on electricity, so the coverage also protects your electrical components.

Benefits Of Mechanical Breakdown Insurance

The benefits of mechanical breakdown insurance are straightforward. Without the coverage, you would end up paying for lawsuits and damages caused when your systems fail. Mechanical systems are bound to depreciate and break down despite best practices and maintenance. Something as small as a short circuit can result in device damages and data loss.

Mechanical breakdown coverage protects your business in the following ways:

  • Pays for lawsuits and court fees
  • Pays for the repair of the malfunctioning system
  • Provides coverage for risks standard property insurance does not

The cost of mechanical breakdown coverage varies depending on the industry, business size, and equipment you want to protect. Protecting expensive business equipment and systems can be costly. Companies in the technology and telecommunications sectors can incur large losses as a result of mechanical breakdown, and the cost will vary depending on the contributing factors. It is essential to assess how much mechanical breakdown insurance your business needs to be able to find customized packages.

Summary

Mechanical breakdown coverage can help you cover the cost of repairs and losses caused when mechanical systems malfunction. Mechanical breakdown coverage is vital for companies in the technology and communications sectors where equipment breakdown can cripple server services, communication, network security, and more. Coverage can help with the cost of repairs and losses when systems malfunction. Finding insurance coverage for business equipment breakdown shouldn't be a daunting task, and we can help. However, not all policies are the same. The goal is to find products customized for your unique business needs, which calls for comprehensive risk assessment.