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MACHINERY BREAKDOWN INSURANCE THAT HELPS YOU KEEP PRODUCING
Why Machinery Breakdown Insurance Matters
For electrical components and manufacturing businesses, the most expensive loss is often not the repair bill — it’s the downtime. A failed press, winding machine, CNC, pick-and-place line, reflow oven, injection moulder or test rig can stop production immediately. Delayed deliveries, line-down chargebacks, scrapped work-in-progress and missed contract targets can cost far more than parts and labour.
Machinery & Equipment Breakdown Insurance (often arranged as “Engineering Breakdown”) is designed to cover sudden and unforeseen breakdown of insured plant and machinery. When paired with business interruption cover, it can protect your turnover and gross profit while the repair is arranged — helping you keep customers supplied and your cashflow stable.
Who Needs Machinery & Equipment Breakdown Insurance?
Machinery breakdown cover is relevant to any business relying on production equipment, process machinery, automation, or calibration-sensitive testing. Within electrical components manufacturing, it’s particularly valuable for operations with single points of failure — where one machine controls a key step in your process.
Typical insured businesses include:
- Connector, cable, wiring harness, loom and termination businesses
- Active & passive components manufacturers
- PCB assembly, SMT lines, pick-and-place and reflow operations
- Injection moulding and overmoulding operations supporting electrical parts
- CNC machining and precision engineering (tooling, housings, brackets, connectors)
- Winding, coil, transformer and motor component production
- Test & measurement labs (production QA and compliance testing)
- Automation integrators and robotic production cells
What Does Machinery Breakdown Insurance Cover?
Machinery breakdown insurance is designed for sudden and accidental damage to insured equipment, which may not be covered under standard property policies. Property insurance typically covers external events (like fire, flood, storm, theft). Machinery breakdown focuses on the machine itself failing due to internal mechanical or electrical causes.
Policy wordings vary, but commonly covered events include:
- Mechanical breakdown – failure of moving parts, bearings, gears, shafts, spindles
- Electrical breakdown – motor burn-out, drive failure, transformer faults
- Control system failure – PLC damage, servo issues, circuit board faults
- Pressure system failure – compressors, hydraulic systems, pumps (subject to terms)
- Overheating / lubrication failure leading to seizure or component damage
- Arcing / short circuit resulting in internal damage to insured equipment
- Operator error where accidental and not deliberate (subject to wording)
- Sudden failure of test equipment affecting calibration and production release
It can also cover reasonable costs of dismantling, re-erection, and sometimes expedited repair costs — depending on insurer appetite and your risk profile. For manufacturing businesses, the key is ensuring the schedule of equipment is accurate, values reflect replacement cost, and critical supporting items (like chillers, compressors, extraction, and power conditioning) are included where they would stop production.
What’s Commonly Excluded or Restricted?
Like all insurance, breakdown cover has limits and exclusions. The most common disputes arise when the loss is not sudden/accidental, or where maintenance issues are the dominant cause. This is why risk presentation and documentation matter.
Common exclusions or restrictions may include:
- Wear and tear, gradual deterioration, corrosion or erosion
- Known defects or pre-existing faults
- Maintenance-related failures where reasonable care was not taken
- Consumables (belts, filters, fuses) unless damaged by an insured event
- Software issues not resulting in physical damage (varies by wording)
- Losses due to poor installation or commissioning (may be project-related cover instead)
- Manufacturer warranty / service contract overlaps (policy will not “double pay”)
The best approach is to combine robust planned maintenance with clear documentation. Underwriters respond well to evidence of preventive maintenance schedules, calibration logs, thermography results (where relevant), and a sensible spares strategy.
Machinery Breakdown Business Interruption (MB BI)
Repair costs are only part of the story. Machinery breakdown business interruption (sometimes called “loss of profits following breakdown”) covers your loss of gross profit and increased cost of working when production is interrupted by an insured breakdown event.
This is particularly important for electrical components manufacturing, where:
- Orders are time-critical and tied to contractual delivery windows
- Production is staged across multiple work centres and one failure creates backlog
- Work-in-progress can be scrapped if processes are interrupted mid-run
- Customers can levy chargebacks, expedite fees, or move supply to competitors
We help you set the right indemnity period, calculate an accurate gross profit sum insured, and ensure the policy can respond to the real financial impact of interruption — not just the cost of a technician and spare parts.
Equipment Commonly Insured Under Breakdown Policies
Machinery breakdown can be arranged for a wide range of plant — from high value CNC and automation equipment to essential utilities that keep your production environment stable. The following items often feature in electrical and components manufacturing schedules:
Production & Assembly Equipment
- CNC machines, lathes, mills, turning centres
- Presses, crimp machines, termination and insertion equipment
- Pick-and-place machines, stencil printers, reflow ovens, wave solder
- Injection moulders, overmoulding presses, hot runners
- Ultrasonic welders, laser marking, potting & dispensing equipment
- Cutting, stripping, winding, braiding and cable processing machinery
Testing, Utilities & Critical Support Systems
- Electrical test rigs, hi-pot/IR test equipment, continuity testers
- Calibration-sensitive measurement and inspection systems
- Compressors, vacuum systems, pumps and hydraulic power packs
- Chillers, process cooling and temperature control units
- Extraction, filtration and environmental controls
- Transformers, switchgear and power conditioning equipment
Underwriters will want clarity on which machines are mission-critical, any single points of failure, and how quickly you can obtain spare parts. If your equipment is older, refurbished, or heavily modified, we’ll help you present maintenance records and risk controls to keep terms competitive.
Why Choose Insure24 for Machinery Breakdown Cover?
- Manufacturing-focused brokers who understand production realities
- Access to specialist engineering insurers (not just generic packages)
- Support with sums insured, BI calculations and indemnity periods
- Guidance on presenting maintenance, calibration and spares strategy
- FCA-regulated advice and ongoing renewal support
- Claims support and insurer liaison when time is critical
Examples of Machinery Breakdown Losses
Underwriters and business owners think differently about breakdown cover. Owners want reassurance that the policy responds when it matters; underwriters want evidence that failures are controlled and predictable. Here are typical real-world scenarios where machinery breakdown cover can be relevant:
1) CNC spindle failure stops machining output
A spindle bearing fails without warning, causing internal damage. Repair involves specialist parts, labour and re-calibration. Without cover, the cost can be significant and lead times can extend if parts are imported.
2) Reflow oven control board fails, halting SMT line
A circuit board fault in the oven’s control system stops production. Replacement boards require OEM supply and engineering call-out. The largest impact is the backlog of assemblies that cannot be shipped.
3) Compressor breakdown impacts pneumatic tools and automation
A compressor failure stops air supply to production cells. Even if individual machines are intact, the line cannot run. If the compressor is not scheduled on the policy, the loss may fall outside cover.
4) Test rig failure delays product release
A calibration-sensitive test system suffers electrical failure. You may not be able to release batches until the equipment is repaired and re-certified, potentially triggering delivery issues and lost revenue.
The right insurance structure focuses on critical path equipment and ensures values and indemnity periods are realistic.
When a critical machine failed, Insure24 helped us get breakdown and BI cover aligned properly. The insurer responded quickly and we avoided a serious cashflow hit.
Manufacturing Director, UK Electrical Components BusinessHow to Arrange Machinery Breakdown Insurance
Getting the right terms comes down to the details. Insurers price and accept breakdown risks based on equipment type, age, maintenance, protection systems and how you manage failure points.
- 1. List your critical machines and supporting utilities (including values and age).
- 2. Confirm maintenance regime (planned servicing, calibration, inspections, logs).
- 3. Identify single points of failure and your spares/contingency plan.
- 4. If adding BI, provide turnover and gross profit details to set accurate sums insured.
- 5. We present the risk to suitable engineering insurers and negotiate competitive terms.
FREQUENTLY ASKED QUESTIONS
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What is machinery & equipment breakdown insurance?
It is specialist engineering insurance that can cover sudden and unforeseen mechanical or electrical breakdown of insured plant and equipment, which is often not covered under standard property policies.
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Is machinery breakdown the same as property insurance?
Not usually. Property insurance commonly covers external perils like fire, flood and theft. Machinery breakdown focuses on internal failure of the machine (mechanical or electrical causes). Many businesses benefit from having both.
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Does it cover wear and tear?
Wear and tear and gradual deterioration are commonly excluded. Cover is intended for sudden, accidental breakdown events. Good maintenance records help support claims and improve underwriting terms.
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Can I add business interruption for breakdown events?
Yes. Machinery breakdown business interruption can cover loss of gross profit and increased cost of working when production is interrupted due to an insured breakdown, subject to policy terms and the chosen indemnity period.
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What information do insurers need to quote?
Typically: equipment list (type, age, value), maintenance regime, critical path/single points of failure, protections, previous breakdown history, and if adding BI, turnover and gross profit details.
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Will older or refurbished machines be covered?
Often yes, subject to underwriting. Insurers may ask for service history, condition reports, or impose higher excesses or specific conditions depending on age, usage and maintenance documentation.
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Does the policy cover electronics and control boards?
Many breakdown wordings include electrical damage, control systems and drives, provided there is physical damage and the item is insured/scheduled as required. We’ll confirm insurer wording and scope during quotation.
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How quickly can I get a quote?
For straightforward equipment schedules we can often obtain indications quickly. For complex manufacturing operations or where BI is required, allow 1–2 business days to present the risk and negotiate terms with engineering underwriters.