What is Refrigeration Equipment Breakdown?

Refrigeration Equipment Breakdown coverage specifically protects against mechanical or electrical failure of refrigeration equipment including walk-in coolers and freezers, reach-in refrigerators and freezers, prep table refrigeration, and other temperature-control equipment, plus resulting food spoilage and business interruption losses.

What You Need to Know

Refrigeration equipment breakdown coverage protects against mechanical and electrical failures—not fire, theft, or physical damage (which standard property insurance covers), but the motor burning out, compressor failing, thermostat malfunctioning, or refrigerant leaks.

This coverage is typically purchased as equipment breakdown coverage or boiler and machinery coverage, and it includes:

• Repair or replacement of the failed refrigeration unit
• Spoilage of all food inventory that becomes unsafe due to temperature loss
• Business interruption covering lost income if the failure forces closure or limited operations
• Extra expense for emergency equipment rental or expedited repairs

Most policies require preventive maintenance and have waiting periods (12-48 hours) before spoilage coverage applies.

Why It Matters for Restaurant Owners

Refrigeration failure is one of the most common and costly equipment breakdowns restaurants face—and standard property insurance doesn’t cover mechanical failures. When your walk-in cooler fails on a Saturday night, you can lose $10,000 to $40,000 in inventory within hours, plus face immediate closure until the unit is repaired or replaced (which can take days or weeks).

Equipment breakdown coverage is relatively inexpensive ($300-$800 annually typically) but can save you from devastating losses. The coverage is essential because refrigeration failures are common—compressors fail, thermostats malfunction, power surges damage electronics, and worn equipment breaks down during the hottest weather when you need it most.

Ensure your coverage includes:

• Adequate spoilage limits matching your typical inventory value
• Business interruption covering realistic closure periods (3-7 days minimum)
• Coverage for all refrigeration units (walk-ins, reach-ins, ice machines)
• Reasonable waiting periods (24-48 hours maximum)

Reduce failure risk and potentially lower premiums through preventive maintenance—schedule professional refrigeration service quarterly, keep condensers clean, monitor temperatures daily with digital sensors, install temperature alarms, and replace aging units before they fail.

Document all maintenance—insurers may require maintenance records for equipment breakdown claims. Install backup temperature monitoring and alarms to catch failures quickly and minimize spoilage.