Equipment Breakdown Coverage
Equipment breakdown coverage is insurance that covers repair or replacement costs when mechanical or electrical equipment fails, plus resulting business income losses and spoiled inventory.
What You Need to Know
When your commercial refrigerator, HVAC system, or electrical panel fails due to mechanical breakdown (not physical damage), this coverage pays for repairs/replacement plus lost income and spoiled food while equipment is down.
Why It Matters for Restaurant Owners
Mechanical failures aren't covered by standard property insurance — only sudden physical damage events. But equipment breakdown is actually more likely than fire or theft.
A failed walk-in cooler can cost $10,000 to replace plus $15,000 in spoiled inventory. HVAC failure in summer could force closure for days. This coverage is relatively inexpensive and pays for itself with a single major equipment failure.
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