For the machine that stops working.
Coverage for the boilers, compressors, electrical panels and computers a business runs on, when they fail from a mechanical or electrical breakdown, and for the spoiled stock and lost income that follow.
Quick answer Equipment breakdown insurance covers repairing or replacing equipment that fails from a mechanical or electrical breakdown, plus other property the breakdown damaged, and often the business income and extra expense that follow.
- Equipment breakdown insurance is built for equipment that makes, carries or runs on power, and equipment that holds pressure or vacuum.
- Standard commercial property forms exclude breakdown losses, so equipment breakdown coverage is added to the property policy or written separately.
- Equipment breakdown insurance excludes depletion, deterioration, rust, corrosion, wear and tear and faulty maintenance.
- Equipment breakdown forms commonly include spoilage of perishable goods, usually under a sublimit.
- A tenant in a leased building should consider equipment breakdown coverage as well as the owner, especially for equipment the tenant owns or is responsible for under the lease.
By Sam Alishahi · CA Insurance License #4348151 · Reviewed October 2026 · How this page is researched
What the property policy was never built for
A commercial property policy responds to things that happen to your property from outside, like fire or wind. A failure that starts inside the equipment is a different kind of loss, and property form exclusions take it out. Equipment breakdown insurance, the successor to boiler and machinery coverage, pays to repair or replace the equipment and other property the breakdown damaged, and often the business income and extra expense that follow.
My question page on equipment breakdown coverage explains the coverage itself. Here I focus on placing it: whether it's already on your property policy or needs adding, which sublimits to raise for your kind of business, and how it fits with the boiler and pressure vessel inspections your state requires.
- What's coveredAnything that makes, carries or runs on power, and anything that holds pressure or vacuum.
- Beyond the repairDamage to other property, business income, extra expense and expediting costs.
- Sublimits to checkPerishable goods, expediting expense, hazardous substances and ordinance or law.
- Not a service contractWear and tear, rust, corrosion and poor maintenance are excluded.
What underwriters will ask
Having these ready means I can go to market on the first call. The quote form asks for the same things, and anything you don’t know yet can wait.
- Equipment list: major systems with age and replacement value.
- Boilers and pressure vessels: type, size and current operating permits.
- Perishables: value of refrigerated or temperature-sensitive stock.
- Income: what a week without your key equipment would cost.
- Lease: who owns the HVAC and other systems if you're a tenant.
- Current policy: property declarations and any equipment breakdown endorsement.
Equipment breakdown insurance, answered
Isn't equipment breakdown covered by my property policy?
Not by the standard property forms. Their exclusions remove breakdown losses, which is what creates the need for equipment breakdown coverage, added to the property policy or written separately. I check your declarations to see whether it's already attached.
Does it cover old or worn-out equipment?
No. Depletion, deterioration, rust, corrosion, wear and tear and faulty maintenance are excluded. The coverage is for an accidental breakdown, not for keeping equipment in working order.
Do I need it if I lease my space?
Often yes. Equipment breakdown is something a tenant in a leased building should consider as well as the owner, especially for equipment you own or are responsible for under the lease.
Does it cover spoiled food or inventory?
Forms commonly include spoilage of perishable goods, usually under a sublimit. If refrigeration is central to your business, that sublimit is the first number I look at.
Does it cover lost data?
Computers can be covered equipment, but one widely used form excludes data-related defects and programming errors. Keep backups, and look at cyber coverage for the data itself.
Who inspects boilers in California?
In California, Cal/OSHA's Pressure Vessel Unit inspects boilers under the Labor Code, and permit inspections can also be done by a qualified inspector employed by an insurance company. Permits are required for power boilers above 15 psig steam pressure, LP-gas tanks over 125 gallons water capacity and air tanks over 1.5 cubic feet, with some air tank exemptions. In the City of Los Angeles, permits come from the Department of Building and Safety.
Do you offer equipment breakdown insurance outside California?
Yes. Clients across the country send the same quote form. California policies are placed directly; outside California the request is handled together with a partner agency in your state, and the shopping across carriers works the same way. Rules, minimums and markets differ by state — see insurance requirements by state.
List the equipment. I'll shop the coverage.
Your property declarations and a list of your major equipment are enough to start.
Alishahi Insurance · Saman Alishahi, independent insurance broker, California License #4348151. General information, not a quote or a promise of coverage; coverage depends on underwriting and the terms, conditions and exclusions of the policy actually issued.
Tell me how to reach you. I’ll take it from there.
Takes about 30 seconds. I review every request personally and call you back, usually the same day.
(424) 552-4545Answered 24/7 · CA License #4348151
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