Plenty can go wrong when you run your own business, and that’s especially true when you rely on equipment and machinery to function properly. After all, equipment that breaks down can result in lost manufacturing or production time. It's not just the lost time; you have to deal with repair bills, too.
Depending on the specifics of each situation, businesses can easily lose tens of thousands of dollars due to the breakdown of their equipment or machinery. For example, a grocery store with a malfunctioning freezer could need to replace their expensive equipment and lose their entire stock of frozen food. Or, an auto repair shop might see their hydraulic lift break down, resulting in temporary closure and hundreds of thousands of dollars in lost revenues and repair bills.
This is why business owners purchase equipment breakdown insurance. It can kick in to pay for repair bills when equipment breaks down, and it can replace lost income you would have otherwise received.
We compared the top equipment breakdown insurance providers that offer coverage as a standalone policy or as an add-on to a business insurance policy. Each was evaluated based on coverage, the underwriting process, and more.
The 7 Best Equipment Breakdown Insurance of 2021
Best Overall: Nationwide
We chose Nationwide as the best overall provider of equipment breakdown insurance due to its customer-friendly online tools and its robust equipment breakdown insurance coverage options.
You can apply for a free quote online or speak with an agent on the phone
Pay your bill and manage claims online
You’ll ultimately need to work directly with an agent to purchase coverage
You need to have business insurance with Nationwide to qualify
This provider, formerly known as Farm Bureau Mutual Automobile Insurance Company, sold its first insurance policy in 1926. Since then, Nationwide has grown to become a well-known and highly rated company that offers a variety of insurance and banking products to families and businesses. Nationwide Insurance also boasts an A+ rating for financial strength from AM Best, so you can rest assured your coverage is reliable.
When it comes to Nationwide’s equipment breakdown insurance coverage, you can purchase insurance that pays for events like power surges and mechanical malfunction, broken equipment, and expenses involved in equipment repair. Nationwide equipment breakdown coverage can also reimburse you for business income losses and lost or damaged material or inventory.
You can apply for a free quote from Nationwide online, but you’ll need to provide ample information about your business, including the type of business you have, your contact information, and your business address. Ultimately, however, you’ll need to speak with an agent to find out how much you’ll pay for coverage when you add equipment breakdown insurance to a general business insurance policy.
Best Add-On Coverage: Allstate
Allstate excels when it comes to offering equipment breakdown coverage you can add onto an existing business insurance policy. You get to work with a local agent to come up with a quote that will protect your business equipment and your business itself from financial losses, and this coverage even applies to the cost of mandatory inspections for key machinery.
Work directly with an agent to build an equipment breakdown insurance policy add-on
Get coverage for mandatory inspections of key machinery, lost income, equipment repair, and more
You can begin building a quote online, but you’ll ultimately need to speak with an agent to buy this coverage
You have to be an Allstate business insurance customer to qualify
We chose Allstate for best add-on coverage due to its robust equipment breakdown coverage that you can add onto an existing Allstate business insurance policy. Allstate was founded in 1931, yet the company has grown since then to become a major provider of auto insurance, homeowners insurance, business insurance, and more.Allstate also has an A+ rating for financial strength from AM Best, which shows their ability to pay out claims.
Allstate equipment breakdown insurance can be added to an existing business insurance policy with the company, which is convenient for Allstate customers. This coverage intends to protect business owners against losses resulting from repairs after a covered incident, as well as costs involved in rush repairs, property damage liability, and mandatory inspections of key equipment. This coverage is also good for covering lost business income after an incident takes place.
You can start on a quote for equipment breakdown insurance on the Allstate website, but you’ll need to speak with an agent to fully build out your quote and get your coverage started. Allstate offers business insurance policies in all 50 states, which is another major plus.
Best for Manufacturing: CNA
CNA stands out when it comes to offering equipment breakdown insurance in a variety of industries where manufacturing takes place, ranging from healthcare to technology and wholesale distribution. The coverage replaces losses resulting from equipment breakdown. Covered losses include the repair or replacement of your equipment, damage to other property, the loss of perishables, and more.
Buy equipment breakdown coverage that is specialized based on your industry
Work with an agent, who can dive into your business details and help you build a free quote
Pay your bill or start a claim online
You cannot get a quote online
We chose CNA as the best option for manufacturing due to their expertise in commercial industries that rely on manufacturing and heavy equipment. This company was originally founded in 1897 as an accident and health insurance coverage provider, but it has changed names and grown tremendously in size since then. These days, CNA offers a variety of business insurance solutions and products to more than one million businesses and professionals around the world. CNA Financial has an A+ rating for financial strength from AM Best.
You’ll need to work with a CNA agent in order to build a quote, but you will find that they offer extensive equipment breakdown coverage that can be tailored to your needs. For example, you can add on additional coverage to your policy for additional losses caused by time, spoilage of inventory or products, or losses to your customers based on time lost for repairs. Additional supplementary coverage can also be purchased based on your industry and may include chlorofluorocarbons(CFCs) and halon found in refrigerants, losses due to legal enforcement of the law, and specific losses due to computers or specific data processing equipment.
When you buy a policy with CNA, you’ll also get to work with specialized, certified risk control experts who can help you identify potential hazards in your business that might lead to significant losses.
Best Coverage With No Restrictions: AXA XL
We chose AXA XL due to its lack of restrictions for covered machinery that suffers a breakdown during an electrical or pressure test, as well as its lack of exclusions and waiting periods for certain types of claims.
Lack of restrictions and waiting periods for certain types of coverage
Equipment breakdown coverage is available nationwide
Work with expert risk consultants who can help you spot hazards early on
You cannot get a quote without being matched to an agent
AXA XL received our top ranking for best coverage with no restrictions due to the fact they advertise few if any restrictions for some machinery and certain types of claims. While not a household name, this provider currently offers insurance solutions in 200 countries and territories around the world. AXA XL claims that more than 90% of Fortune 500 companies work with them in some capacity. The company also has an A+ rating for financial strength from AM Best.
When it comes to their machinery breakdown insurance coverage, AXA XL offers access to risk consulting experts who can help spot problems before they occur. Their policies also come with coverage for accounts receivable and transportable off-site equipment, as well as utility interruption services that include internet access, data transmission, and more. Perishable goods coverage also includes control of damaged property, and you can buy coverage for newly installed equipment or equipment that is currently being installed.
You do have to work with an AXA XL agent to get a quote, but equipment breakdown coverage is offered by this provider nationwide. Also note that, when it comes to repair or replacement of machinery, you can receive up to 150% of losses associated with environmental, efficiency, or safety enhancements.
Best Coverage for Home: American Family Insurance
American Family Insurance excels when it comes to offering equipment breakdown coverage for your home, which can make sense if you have expensive home components or appliances.
You can start a quote using their website
Policies start at $30 per year for homeowners
Expensive components of your home like sump pumps, air conditioning units, and emergency generators can be covered
You can purchase this coverage as a standalone policy
You have to speak with agent to get pricing and start your coverage
We chose American Family Insurance due to its unique equipment breakdown coverage for homeowners. Unlike equipment breakdown coverage for machinery, this type of policy can pay for equipment breakdown losses when home appliances and systems malfunction or break down due to circumstances beyond general wear and tear.
American Family Insurance was originally founded as the Farmers Mutual Automobile Insurance Company in 1927, but has since grown to become a major provider of homeowners insurance, auto insurance, business insurance, health insurance, and more. American Family Insurance also has an A rating for financial strength from AM Best. Overall, American Family Insurance is our top pick for best coverage for home.
While equipment breakdown coverage for homes is different from policies you buy for manufacturing equipment and machinery, having this type of policy can definitely pay off. Coverage from American Family Insurance can kick in to repair or replace equipment like refrigerators, stoves, ovens, washers and dryers, HVAC systems, electrical systems, well pumps, swimming pool equipment, and more. Policies start at just $30 per year for homeowners or $20 per year for condo owners, and you can add on additional coverage for sump pump failure and water backup, or for service lines to your home.
You can enter information to start a free quote on the American Family Insurance website, but note that you’ll have to speak with an agent to get your coverage started.
Best for Technology Equipment: Great American Insurance Group
We chose Great American Insurance Group as best for technology equipment for its specialized equipment breakdown coverage for businesses that focus on computers. This coverage can be purchased as part of a standard package policy, and the company offers unique inclusions for businesses that rely on technology and computers to function.
Purchase tailored coverage based on your industry
Work directly with an agent to build your policy
You cannot buy this coverage as a standalone policy
No way to start a free quote online
Great American Insurance Group offers specialized coverage for commercial purposes, including equipment breakdown coverage for microelectronics, cloud computing, and more. This company was founded in 1872 as the German American Insurance Company, but it has grown since then to become a major provider of individual and business insurance coverage. Great American Insurance Company also has an A+ rating for financial strength from AM Best.
We chose Great American Insurance Group due to its specialized commercial coverage, including its TechAdvantage equipment breakdown and technology coverage. This insurance plan can help reimburse you for losses when technology equipment like cloud computing software or microelectronics break down or otherwise face an interruption. You can even add public relations coverage that can pay for PR expertise if a major equipment breakdown damages your business's reputation.
One downside of Great American Insurance Group is the fact that you cannot enter your information to start a quote for a policy online. You’ll have to speak with an agent to purchase a policy, and you can only buy this coverage as part of a standard business insurance policy package.
Best Coverage for Medical Facilities: Travelers
We chose Travelers as the best provider for medical facilities based on their specialized coverage for boilers, pressure vessels, and other types of equipment used by medical facilities and laboratories.
Specialized coverage for medical and laboratory equipment offered
Work with an agent to build your quote
You can file claims online with their claims center
No way to get information on pricing without speaking with an agent
Coverage is specialized and not as broad as some other equipment breakdown policies
We chose Travelers due to its tailored coverage for medical facilities and laboratories that use boilers, pressure vessels, and other complex equipment to function. Travelers Insurance has been inspecting and providing insurance for this type of equipment for many years, which makes them an expert in this very specific niche. You can also rely on Travelers in terms of its ability to pay out claims. Currently, the company has an A++ rating from AM Best.
Equipment breakdown insurance from Travelers is offered specifically for equipment like boilers, pressure vessels, refrigeration units, air conditioning, electrical equipment, and communications and data systems.
Also note that Travelers Insurance offers the assistance of their risk control specialists, who can survey your property to check for hazards that could prove costly in the event of an accident. They also offer non-destructive testing services, which can help you control and manage unplanned electrical outages.
What Is Equipment Breakdown Insurance?
Equipment breakdown insurance, also called boiler and machinery insurance, is a type of insurance coverage that protects against financial losses caused by various equipment breaking down. This coverage can pay for the cost of repairs or replacement of your equipment, as well as financial losses caused by your business being temporarily out of commission.
Generally speaking, this type of coverage is activated when specific incidents take place, such as a power surge, an electrical short, a mechanical breakdown, motor burnout, or operator error. While most policies cover computers, your specific policy may not cover computer software. Be sure to read through all the inclusions and exclusions.
Why Do You Need Equipment Breakdown Coverage?
If you have commercial property insurance, you may be wondering if you need equipment breakdown insurance at all. It’s important to understand that commercial property insurance protects against hazards like fire, but it is not created to cover specific damage to your mechanical equipment or losses caused by mechanical interruptions.
Also, keep in mind that you may want coverage to replace lost income while your equipment is being repaired or replaced. You may also want coverage that can replace any spoilage of products that can occur when your equipment breaks down, which is not covered under a commercial property policy.
What Is Included in Equipment Breakdown Coverage?
Equipment breakdown insurance policies vary in the terms of their inclusions, so make sure to read over any policies you’re considering. Generally speaking, equipment breakdown coverage intends to pay damages caused by internal forces. This can include power surges, breakdowns of machinery, motor burnout, losses caused by operator error, electrical shorts, and more.
However, you should note that normal wear and tear is not covered by equipment breakdown insurance. Computer software may not be covered depending on your policy, but you may be able to purchase cyber liability insurance that covers computers and software products you use.
How Much Does Equipment Breakdown Insurance Cost?
While equipment breakdown insurance for a condo or house can cost as little as $20 to $30 per year, the cost of equipment breakdown coverage for businesses varies based on the industry your business is in, the size of your business, the specific equipment you have, the annual income of your business, and the types of coverage your policy includes.
If you’re shopping for an equipment breakdown insurance policy, your best bet is getting quotes from at least two to three providers so you can compare coverage and premiums to find the best deal.
How We Chose the Best Equipment Breakdown Insurance
We compared more than a dozen insurance providers online in order to find companies with broad national reach and specialized policies for commercial or residential purposes. We looked for companies with solid ratings for financial strength and we compared policies to find ones with expansive coverage options. While we included some monoline policies that you can purchase separately, we also included providers that offer equipment breakdown insurance as part of a broader business insurance policy. We weighed industry ratings like AM Best's financial strength ratings as well as company history and customer service to select the best providers of this specialized insurance coverage.
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