PROPERTY INSURANCE
Equipment breakdown insurance definition
Equipment breakdown insurance is commercial cover that protects against loss or damage caused by mechanical, electrical or other equipment failures.
In practice, this means cover for most forms of equipment, including boilers, computers, telephones, air-conditioning and security systems, among other equipment. The insurance doesn't just cover repair or replacement costs, but can also compensate for lost labour time, perishable stock, temporary rental of equipment and lost income. This term gives insurers, brokers, reinsurers and risk managers a common way to discuss the concept when reviewing policies, claims, regulation or market data.
This term is especially useful in relation to commercial insurance and claims assessment. It helps clarify what losses may be covered and how policy wording affects the scope of protection. For instance, equipment breakdown insurance typically covers equipment that is not protected as standard by commercial property insurance. It also helps users compare how insurance is structured, regulated, priced or claimed across different markets.
Equipment breakdown insurance is closely related to boiler and machinery, business interruption, property insurance and machinery breakdown. Linking these concepts together helps build a clearer glossary structure and gives readers a stronger understanding of how individual insurance terms connect within wider international insurance practice.
At a glance
- Used in
- Property insurance, commercial insurance and claims assessment.
- Purpose
- Helps clarify what losses may be covered and how policy wording affects the scope of protection.
- Important because
- Clear definitions support better comparison of insurance products, market practices and regulatory requirements across jurisdictions.
- Related terms
- boiler and machinery, business interruption, property insurance and machinery breakdown.
Example of equipment breakdown insurance
A critical production machine breaks down and damages nearby equipment. Equipment breakdown insurance may cover repair costs and related business interruption losses.