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Equipment Breakdown Coverage: Protection When Critical Systems Fail
Most commercial property policies exclude mechanical and electrical breakdowns—leaving significant coverage gaps for businesses that depend on HVAC systems, boilers, generators, refrigeration units, and other essential equipment. Equipment Breakdown Coverage fills this critical void by protecting against sudden mechanical failure, electrical arcing, motor burnout, and operator error that can bring operations to a halt.
Unlike standard property coverage that typically only addresses external perils like fire or storm damage, this coverage responds when equipment fails from internal causes—the most common type of loss businesses actually face. When a transformer blows, a generator fails, or an electrical surge damages control systems, the financial impact extends far beyond repair costs. Business interruption, spoiled inventory, temporary equipment rental, and emergency service calls can quickly escalate into six-figure losses.
Why This Matters for Your Clients:
The reality is that modern businesses are increasingly dependent on complex mechanical and electrical systems. A single component failure can cascade into operational paralysis. For multi-family properties, a failed HVAC system in summer creates tenant complaints and potential liability. For hotels, generator failure during an event means lost revenue and reputation damage. For municipalities, a transformer breakdown affects entire communities and critical services.
With deductible options from $1,000 to $250,000 and coverage available for portfolios up to $50MM, you can tailor protection to match your client's risk tolerance and budget. At 20% commission and premiums starting at just $100, this is an easy conversation starter that demonstrates you're thinking holistically about your client's exposure—not just checking boxes on a standard policy.
Available nationwide with fast quotes and flexible terms through Shepherd Specialty.