• Equipment Breakdown Insurance
• Mechanical Breakdown Insurance

Equipment Breakdown Insurance:
Don’t Let Equipment Breakdown Slow You Down

Virtually any kind of equipment breakdown can compromise your business to some extent – and damage your bottom line. Unfortunately, many business owners choose not to insure against possible losses that stem from equipment breakdown. And that’s risky.

Because property insurance typically doesn’t protect against equipment damage, and warranties cover only so much, savvy business owners make equipment breakdown insurance part of their company’s insurance portfolio – so if the worst happens, they won’t have to dip into their reserves to cover their losses.

“Most companies need equipment breakdown insurance, even if they’re not in the business of manufacturing a product,” says Brenda Miller, Sales Supervisor for Nationwide Insurance. “Computer systems, voicemail systems, refrigeration – as well as your heating and air conditioning systems – all would fall under an equipment breakdown policy.”

How equipment breakdown insurance helps

Equipment breakdown insurance covers the actual property damage to the equipment as well as other loss caused by the breakdown such as business income loss, food spoilage, damage to other neighboring properties, or expenses incurred to rent equipment temporarily or expedite equipment repair or replacement.

Because the very nature of business equipment is changing -- becoming less mechanical and more computerized -- equipment breakdown insurance is more important than ever. Computerized equipment or machines controlled by microprocessors are extremely sensitive to power surges and electrical fluctuations, both of which are leading causes of equipment failure in the US.

Moreover, most equipment is vital to business operations and income. When a breakdown happens, it can bring your business – and income – to a halt. In addition, reliance on the Internet and real-time web transactions requires more complex and expensive computer and inventory systems. Often company records, inventory and databases are stored in digital formats that are almost impossible to access when equipment is not functioning, causing delays and loss of income.

What if I don’t own my building?

Even if you lease your building or use equipment that belongs to others, you need equipment breakdown insurance. Let’s say you run a restaurant in a leased space, and the electrical panel shorts out, killing power to the heat, air conditioning, lights and refrigerators for a couple of days. While the owner of the building is responsible for making the repairs to the panel, you’ve lost customers and income. Who’s going to pay for your lost business income? When you have our Equipment Breakdown insurance, we do.

What if an equipment problem off-site impacts my business?

Sometimes equipment breakdown at other locations can cause significant losses to your business. For example, if you run a small business and depend upon your web site for orders chances are that an independent Internet service provider hosts your site at another location. What happens if that location loses power or experiences damage to its equipment, causing an interruption of your web presence resulting in a loss of orders? Equipment Breakdown coverage covers business income loss resulting from an equipment breakdown at the location of key suppliers.

Will my warranties cover damage to equipment?

Warranties are restrictive, and typically cover new equipment for a determined length of time and for specific types of product failures. Warranties also don't pay for business income loss or equipment damage due to operator error, the cause of many equipment breakdowns. Equipment Breakdown insurance pays for business income losses due to a breakdown and many other expenses that would not be covered under a typical warranty.

How much should I buy?

It’s important to look beyond the face value of the equipment being insured, and consider all of the situations that could occur when determining the amounts and limits of coverage. Damage could occur to other property as a result of an equipment breakdown. What if parts for the damaged equipment are not readily available? What if you are closed for an extended period of time? Equipment breakdown losses can really add up, your Nationwide insurance advisor can assist you in determining the amount of coverage you need.

Contact a local Nationwide Insurance agent and find out how our Equipment Breakdown insurance policies can provide you great coverage for your company.