
Equipment Breakdown Coverage
Commercial Property policies cover many perils such as fire, wind, and lightning; however, they are not designed to cover unique losses caused by equipment failure. Most property policies will exclude losses that are a result of mechanical breakdown, electrical arcing, centrifugal force or explosion of vessels under steam pressure. Not only would the property damage not be covered, but the resulting loss for the interruption of operations would also not be covered. Equipment breakdown coverage would pick up coverage for electrical equipment, air conditioning & refrigeration systems, mechanical equipment and pressure vessels.
Covered Situations
Here are a few examples that would likely be covered under breakdown and not under the stand alone property policy:
- An overload or power surge hits your phone system or switchboard causing damage to the system and downtime at your office.
- A restaurant’s refrigeration unit is damaged when a bearing is thrown causing damage to the refrigerator and spoiling $5,000 worth in meat and fish. (You would also need spoilage coverage to get the full benefit.)
- Vibration causes moving parts in an air conditioning unit to seize, resulting in damage to the system.
Policies are Different
Not all Boiler and Machinery/ Equipment Breakdown policies are the same. Some have Basic coverage only for the Boiler and machinery and others have Broad or Comprehensive coverage picking up additional electrical exposures. Also, some policies will exclude certain types of equipment such as medical devices or devices used in research.
Be sure to discuss your specific situation and operational exposures with your Lake of the Ozarks insurance agent. Steven Naught is a Certified Insurance Counselor with the Naught-Naught Agency. He can be reached at 573-348-2794.
Contact Insure the Lake today for all your Lake of the Ozarks business insurance needs!

Steve Naught, CIC
NAUGHT-NAUGHT AGENCY
3736 Osage Beach Parkway
Osage Beach, MO 65065
Next to Golden Coral
T: 573-348-2794
F: 573-348-0191
stnaught@naught-naught.com