Equipment Breakdown Insurance protects Canadian businesses relying on costly equipment from unexpected failures.
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When Critical Equipment suddenly stops working
For many businesses, daily operations depend on equipment running smoothly—whether it’s refrigeration systems, production machinery, electrical panels, or computer servers. When this equipment fails unexpectedly due to mechanical or electrical breakdown, the financial impact can be significant. Equipment Breakdown Insurance helps businesses cover repair costs, replace damaged equipment, and manage losses caused by downtime.
An equipment breakdown typically refers to a sudden and accidental mechanical or electrical failure. This can include motor burnout, power surges damaging electrical systems, pressure vessel explosions, or refrigeration compressor failures.
Unlike normal wear and tear, these incidents occur unexpectedly and often bring operations to a halt. Equipment Breakdown Insurance helps cover the cost of diagnosing the issue, repairing the equipment, or replacing components so operations can resume quickly.
Many business owners assume property insurance protects everything in their building—but most property policies only cover damage caused by external events such as fire, wind, or vandalism.
Mechanical or electrical failure from internal causes—like a short circuit or motor failure—is usually excluded. Equipment Breakdown Insurance fills this gap by covering internal equipment failures that traditional property policies often exclude.
Businesses that rely heavily on machinery or electrical systems face the greatest risk. Restaurants depend on refrigeration and cooking equipment, contractors rely on power tools and compressors, manufacturers use production machinery, and offices rely on servers and HVAC systems.
Even a short breakdown can disrupt operations and lead to lost revenue, spoiled inventory, or delayed projects.
Yes. Many Equipment Breakdown policies include business interruption protection. If a breakdown forces your business to temporarily close or slow operations, the policy may help cover lost income and certain ongoing expenses while repairs are completed.
This support can be critical for businesses that rely on continuous operations to maintain cash flow.
In many cases, yes. For example, if a restaurant’s refrigeration system fails and food spoils, or a manufacturer loses materials due to machinery malfunction, the policy may help cover those losses.
Coverage can extend beyond the equipment itself to the financial consequences of the failure.
Other Business Insurance Coverage options to consider
- Commercial General Liability Insurance
- Errors and Omissions Insurance
- Professional Liability Insurance
- Directors and Officers Insurance
- Cyber Liability Insurance
- Business Liability Insurance
- Equipment Breakdown Insurance
- Builders Risk Insurance
- Commercial Property Insurance
- Commercial Auto Insurance
- Commercial Crime Insurance
- Commercial Truck Insurance
- Legal Expense Insurance
- Media Liability Insurance
- Pollution Liability Insurance
- Product Recall Insurance
- Tools and Equipment Insurance
- Vacant Property Insurance
- Business Contents Insurance
- Employers Liability Insurance
- Cargo Insurance
- Special Event Insurance
- Malpractice Insurance
- Fleet Insurance
- Commercial Tenant Insurance
- Liquor Liability Insurance
- Cyber Crime Insurance
Common claim scenarios for Equipment Breakdown Insurance
Many businesses depend on critical equipment such as refrigeration systems, electrical panels, HVAC units, and production machinery. When these systems suddenly fail due to mechanical or electrical breakdown, operations can stop immediately. Equipment Breakdown Insurance helps cover repair costs, replacement expenses, and financial losses caused by downtime, allowing businesses to recover quickly.
Commercial Refrigeration Failure
Problem: A restaurant’s refrigeration compressor suddenly burns out overnight due to an electrical failure. By the next morning, thousands of dollars worth of food inventory has spoiled, and the restaurant cannot operate until the refrigeration system is repaired. In addition to equipment repair costs, the business faces inventory losses and potential lost income while waiting for service technicians.
How Insurance Helps: Equipment Breakdown Insurance can cover the cost to repair or replace the refrigeration unit, reimburse the value of spoiled inventory, and potentially cover lost income during downtime. Repairs and replacement of commercial refrigeration systems can often range from $8,000 to $25,000, while spoiled inventory could add several thousand dollars more. The policy helps offset these costs so the restaurant can reopen quickly.
Power Surge Damages Electrical Systems
Problem: A sudden electrical surge damages a business’s main electrical panel and connected equipment, including computers, point-of-sale systems, and lighting controls. The business is forced to shut down operations while electricians diagnose and repair the damage.
How Insurance Helps: Equipment Breakdown Insurance helps pay for electrical repairs, replacement of damaged systems, and professional diagnostic services. Electrical panel and system repairs may range from $5,000 to $20,000, depending on the extent of the damage. Coverage helps restore operations faster without forcing the business to absorb the entire financial burden.
Production Machinery Motor Burnout
Problem: A manufacturing company experiences a sudden motor burnout in a critical piece of production machinery. The machine stops mid-operation, halting production and delaying customer orders. The breakdown results in costly downtime and potential contract penalties.
How Insurance Helps: Equipment Breakdown Insurance can help cover the cost of repairing or replacing the damaged motor and may also help with business interruption losses caused by the halted production. This coverage helps the company get equipment repaired quickly and resume normal operations.
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- Our partner brokers are dedicated to your business's best interests, not those of an insurance company. Our advice is always honest and unbiased, ensuring you get the right coverage for your unique needs without any unnecessary extras.
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Why great insurance doesn’t have to cost more
- Our partner brokers work with over 40 trusted insurance providers to offer a wide range of business coverage options. They compare policies side-by-side to find the protection that best fits your company’s needs and budget.
- By looking at multiple quotes for you, they make sure you get the most cost-effective coverage without giving up any of the protection you need. It’s about finding the right policy at the right price. Our advanced technology makes the process of getting insurance quick and efficient. This keeps our costs down — and those savings go straight back to you.
- Our partner brokers extensive portfolio of commercial clients gives them substantial negotiating power with insurers. They use this advantage to secure exclusive rates and enhanced coverage for your business—often resulting in a better overall value than you can find on your own.