Equipment Breakdown Coverage
What is 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.
Equipment Breakdown Cost Calculator
Calculate the true cost of equipment failure vs. insurance coverage
Cost to repair or replace the failed equipment (walk-in cooler, HVAC, etc.)
Value of food/beverages that would spoil during equipment failure
Days you'd be closed or operating at reduced capacity during repairs
Your typical daily revenue (used to calculate lost income)
Estimated annual cost for equipment breakdown coverage (ask your agent)
Total Cost of Equipment Failure
Coverage Value Analysis
⚠️ CRITICAL: Standard property insurance does NOT cover mechanical/electrical failures. Without equipment breakdown coverage, you pay 100% of these costs out-of-pocket. Equipment failures are MORE LIKELY than fires or theft.