Appointments Call Us
Home » Equipment Breakdown Insurance: Protecting Manufacturing Assets
April 25, 2024

Equipment Breakdown Insurance: Protecting Manufacturing Assets

In the realm of manufacturing, the smooth operation of equipment is paramount. Heavy machinery, precision tools and other equipment all play crucial roles in a reliable and orderly production process. As such, any unexpected breakdown can result in costly downtime, affecting productivity and profitability. This is where equipment breakdown insurance steps in as a valuable financial safeguard for manufacturing companies. orange and black heavy equipment

What Is Equipment Breakdown Insurance?

Equipment breakdown insurance is a specialized form of property coverage designed to protect businesses from financial losses due to unexpected equipment failures. Unlike typical property insurance, which may only cover damages from external causes like fire or theft, equipment breakdown insurance focuses on internal failures that can arise from mechanical breakdowns, electrical malfunctions or operator errors.

What Does Equipment Breakdown Insurance Cover?

The coverage provided by equipment breakdown insurance can extend beyond just the repair or replacement of damaged equipment. It also often encompasses various aspects of financial protection, including the following:

  • Equipment repair and replacement—The policy typically covers the cost of repairing or replacing damaged machinery and equipment, including parts and labor expenses.
  • Business interruption—In the event of a breakdown that halts production, equipment breakdown insurance can compensate for lost income during the downtime period, helping to mitigate the financial impact of interrupted operations.
  • Spoilage or contamination—For manufacturing processes involving perishable goods or sensitive materials, equipment breakdown insurance can cover losses resulting from spoilage or contamination caused by equipment failures.
  • Additional expenses—In some cases, businesses may incur additional costs to expedite repairs or arrange temporary replacements. Equipment breakdown insurance can reimburse these extra costs to minimize disruptions to operations.
  • Liability protection—If a machinery breakdown leads to property damage or bodily injury to third parties, equipment breakdown insurance may provide liability coverage for legal expenses and settlement costs.

Why Is Equipment Breakdown Insurance Important?

For manufacturing companies, the importance of equipment breakdown insurance is multifaceted, as an adequate policy may provide the following benefits:

  • Risk mitigation—Manufacturing operations rely heavily on machinery and equipment, making them vulnerable to unexpected failures. Equipment breakdown insurance helps mitigate the risk of financial losses associated with these breakdowns.
  • Productivity preservation—The financial support of these policies can help mitigate disruptions in production schedules and delays in order fulfillment, potentially limiting reputational harm related to breakdowns and maintaining positive relationships with customers.
  • Financial stability—The cost of repairing or replacing industrial equipment can be substantial, especially for specialized machinery. Equipment breakdown insurance provides economic security by covering these expenses, allowing businesses to avoid significant financial setbacks.

Get the Right Coverage

With over 30 years of experience serving manufacturers in the Chicagoland area and throughout the Midwest, Pitcher Insurance Agency is well-positioned to help your company secure ideal coverage. Contact us today to learn more or to get a personalized equipment breakdown insurance quote.


This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information. 


Categories: Blog

Tags: Equipment Breakdown Insurance

Leave a Reply

Your email address will not be published. Required fields are marked *

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

©2024. All rights reserved. | Powered by Zywave Websites