What does equipment breakdown insurance cover?

It covers sudden, accidental failure of a building's mechanical, electrical, and pressure systems, things like HVAC and chillers, electrical distribution, boilers, motors, and elevators, from causes such as electrical arcing, mechanical breakdown, and pressure rupture. It often also covers the resulting business income loss and any spoilage, which a standard property policy does not fully address.

Doesn't my property policy already cover my building's systems?

Not for internal failure. A standard property policy covers damage from external perils like fire or wind, but it generally excludes the equipment's own breakdown, the burned-out motor, the ruptured boiler, the arced panel. Those failures are common and expensive, and equipment breakdown is the coverage built specifically for them.

Which commercial buildings need it most?

Buildings whose rent and operations depend heavily on systems: office and medical office, mixed-use, refrigerated or food-service space, and any property with significant HVAC, electrical, or elevator dependency. The greater the downtime cost when a system fails, the more the coverage is worth carrying.

Does it cover the lost income while the system is repaired?

Often yes. Equipment breakdown policies commonly include business income and extra expense for the downtime caused by a covered breakdown, and spoilage coverage where perishable goods are involved. That income protection is frequently the larger part of the loss, since a failed system can keep tenants from operating for days or weeks.

Equipment Breakdown Insurance - Vantage Point Risk

The systems that keep tenants in the building.

Equipment breakdown covers the mechanical, electrical, and pressure-system failures a standard property policy generally does not. HVAC, electrical distribution, boilers, elevators, and the building systems tenants depend on are the hidden engine of rent continuity, and they fail in ways fire-and-wind coverage was never built for.

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Equipment breakdown responds to sudden, accidental failure of building systems from causes like electrical arcing, mechanical breakdown, motor burnout, and pressure-system rupture. The common misconception is that fire and wind are the big perils while the systems take care of themselves. In reality a failed chiller, an arced electrical panel, or a dead boiler can shut a building down and run into serious money, and the standard property form does not fully address it.

Why standard property coverage leaves the gap

A property policy covers external perils, fire, wind, water, theft. It generally excludes the internal failure of the building's own equipment: the motor that burns out, the boiler that ruptures, the electrical system that arcs. Those are exactly the failures that interrupt tenant service and rent. Equipment breakdown fills that gap and often picks up the resulting business income and spoilage too.

Which buildings depend on it most

The more a building's value and rent depend on its systems, the more this coverage matters. Office, medical office, mixed-use, refrigerated or food-service tenants, and any highly system-dependent asset carry real exposure. A medical office that loses power conditioning or a building that loses its only chiller is not just facing a repair, it is facing tenants who cannot operate.

How we handle it

We look at the building's age and systems, its tenant dependencies, and the income at risk if a major system fails, then confirm equipment breakdown is on the policy and limited to match. On a system-dependent building it is usually inexpensive relative to the downtime it prevents.

The systems that keep tenants in the building.

Why standard property coverage leaves the gap

Which buildings depend on it most

How we handle it

Equipment breakdown, answered.

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The systems that keep tenants in the building.