Equipment Breakdown Insurance

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Protect your food or beverage factory against sudden machinery failure, production downtime, and spoilage losses.

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We compare quotes from leading insurers

  • Allianz
  • Aviva
  • QBE
  • RSA
  • Zurich
  • NIG

EQUIPMENT BREAKDOWN COVER THAT KEEPS PRODUCTION MOVING

Why Equipment Breakdown Insurance Matters

In food and beverage manufacturing, the cost of a machinery failure is rarely just the repair bill. When a critical piece of equipment fails - a chiller, boiler, pasteuriser, bottling line, mixer, conveyor, packaging machine, compressor, or control panel - production can stop instantly. That downtime can create a chain reaction: missed retailer deliveries, wasted labour, spoiled ingredients, scrapped batches, emergency call-out charges and reputational damage.

Standard property insurance is designed to respond to events like fire, flood or storm damage. But many mechanical and electrical failures happen without an “insured peril” such as fire. Equipment breakdown insurance (also known as mechanical breakdown or engineering breakdown) is designed to fill that gap, helping you recover quickly when machinery fails unexpectedly.

What Does Equipment Breakdown Insurance Cover?

Equipment breakdown policies are designed to cover sudden and accidental mechanical or electrical damage to insured plant and machinery. The exact scope varies by insurer and the cover level selected, but most policies focus on the repair or replacement of the damaged equipment and can be extended to include consequential losses such as spoilage and business interruption.

For food and beverage businesses, this is especially valuable because your equipment operates under high load, strict hygiene regimes, and often with temperature-critical processes. A breakdown can jeopardise compliance, safety, and contractual service levels.

  • Mechanical breakdown – sudden failure of moving parts, bearings, pumps, gearboxes, motors and drives.
  • Electrical breakdown – damage from short circuits, arcing, power surges, control panel failures and motor burnouts.
  • Sudden and accidental damage – unforeseen damage during normal use (subject to policy terms).
  • Repair or replacement costs – parts, labour and (often) reasonable additional costs to restore function.
  • Expediting expenses – emergency shipping, overtime, specialist contractors (where insured).
  • Engineering inspection support – some policies include access to engineer networks and claims support.
  • Spoilage and deterioration of stock – when refrigeration/temperature control fails (optional extension).
  • Equipment breakdown business interruption – loss of gross profit due to insured breakdown (optional extension).
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What Equipment Can Be Covered?

Most food and beverage manufacturers have a mixture of processing equipment, utilities, packaging lines, and cold chain plant. We help you map what you rely on day-to-day and ensure the insurance reflects your real operational dependencies - including the “single points of failure” that can shut down the entire site.

Depending on insurer appetite and the way your policy is structured, equipment breakdown insurance can cover:

Processing & Production Equipment

  • Mixers, blenders, grinders and mills
  • Cookers, kettles, ovens and fryers
  • Pasteurisers, sterilisers and UHT equipment
  • Pumps, valves, dosing and filling systems
  • CIP systems and hygiene-critical plant
  • Compressors, motors, drives and gearboxes

Packaging, Handling & Utilities

  • Bottling lines, canning lines and labellers
  • Conveyors, palletisers and wrapping machines
  • Boilers, steam systems and heat exchangers
  • Refrigeration plant, chillers and cold rooms
  • HVAC systems and environmental controls
  • Control panels, PLCs and automation systems

For many manufacturers, the most painful losses occur when a utility item fails: refrigeration, compressed air, steam, or process water. These may not feel like “production equipment”, but they are often essential for safe manufacture and storage. We’ll help you identify where a breakdown could create a food safety issue or destroy perishable stock, and build the policy accordingly.

Common Causes of Machinery Breakdown in Food & Beverage

Breakdowns are often multi-factor: wear and tear, vibration, overheating, improper lubrication, power quality issues, blocked filters, or control faults. Some issues are gradual, while others are sudden. Equipment breakdown cover is designed for sudden and accidental damage, and claims are typically stronger when you can demonstrate sound maintenance and inspection regimes.

  • Motor burnout and electrical arcing in control panels
  • Bearing failure on conveyors, pumps and drives
  • Compressor failure disrupting pneumatic systems
  • Chiller breakdown causing temperature excursions
  • Boiler or steam system faults halting cooking processes
  • PLC/automation faults stopping the line
  • Power surge damage to sensitive electronics
  • Pump failure in CIP or process transfer systems

Property Insurance vs Equipment Breakdown

Many businesses assume that “we have buildings and contents insurance, so we’re covered.” The problem is that property policies tend to require an external insured peril (like fire or flood). If your pasteuriser fails due to internal mechanical damage, or your control panel fails due to electrical arcing, you can have a major loss with no property claim. Equipment breakdown insurance is specifically designed to cover those internal failures.

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Spoilage, Deterioration & Temperature-Controlled Stock

For many food and beverage businesses, the biggest single exposure is not the machine - it’s what the machine protects. A refrigeration or chiller failure can lead to rapid spoilage and a mandatory disposal of stock. Even where product is still within temperature tolerance, you may need to quarantine it pending QA checks, which can disrupt deliveries and cashflow.

Equipment breakdown insurance can often be extended to cover spoilage and deterioration caused by an insured breakdown, such as:

  • Loss of refrigerated and frozen stock due to chiller or cold room failure
  • Spoilage of WIP (work in progress) during production stoppages
  • Deterioration of ingredients sensitive to temperature/humidity
  • Waste and disposal costs (where insured)
  • Emergency refrigeration hire (where insured)

Equipment Breakdown Business Interruption

Standard business interruption (BI) usually follows property damage (fire/flood). But equipment breakdown can stop production without property damage. With an equipment breakdown BI extension, you can protect your gross profit if an insured breakdown causes downtime.

This is especially valuable if you supply supermarkets, wholesalers, or foodservice contracts with strict service levels. Missed deliveries can cause lost accounts, penalties, or delisting risk. A well-structured BI extension can help you navigate the disruption and recover faster.

What Affects the Cost of Equipment Breakdown Insurance?

Pricing depends on your equipment values, operational criticality, and the controls you have in place. Insurers generally view well-maintained, well-documented sites more favourably - particularly when preventive maintenance is structured and evidence-backed.

Common underwriting factors include:

  • Total value of machinery and plant
  • Age and condition of key equipment
  • Maintenance schedules and service contracts
  • Critical spares availability and lead times
  • Power quality / surge protection and electrical controls
  • Alarmed temperature monitoring for cold rooms
  • Back-up capacity (redundant chillers/boilers)
  • Claims history and prior breakdown incidents

Risk Management That Can Reduce Downtime

Insurers like to see practical steps that reduce both the frequency and severity of breakdowns. These are also the steps that help you protect your customers and keep deliveries on time:

  • Planned preventive maintenance (PPM) with documented logs
  • Thermal imaging inspections on electrical panels and high-load circuits
  • Condition monitoring: vibration analysis on motors and rotating plant
  • Spare parts strategy for critical components with long lead times
  • Remote temperature monitoring with alerts for cold storage
  • Surge protection / UPS for control systems and automation
  • Clear escalation procedure for out-of-hours engineer call-outs
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Why Choose Insure24 for Equipment Breakdown Cover?

Food and beverage manufacturing risks are specialised. A generic policy that doesn’t reflect your processes can leave gaps - especially around refrigeration, spoilage, line downtime, and high-dependency equipment. Insure24 helps you structure the cover so it aligns with how your factory actually runs.

  • Specialist advice for food & beverage manufacturing sites
  • Access to insurers that understand engineering breakdown risks
  • Support aligning cover to cold storage and spoilage exposures
  • Fast, practical quoting with clear documentation
  • Ongoing support as you expand capacity or add new lines
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How to Get Equipment Breakdown Insurance

We’ll help you obtain cover quickly by gathering the information insurers typically need. For many factories, a quote can be produced quickly, and for larger or more complex sites we can support a more detailed submission.

  • 1. Outline your operations and key production dependencies
  • 2. Confirm machinery values and critical equipment list
  • 3. Review maintenance approach and cold storage monitoring
  • 4. Select cover extensions: spoilage, BI, expediting expenses
  • 5. Bind cover and receive documents
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FREQUENTLY ASKED QUESTIONS

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What is equipment breakdown insurance?

Equipment breakdown insurance covers sudden and accidental mechanical or electrical failure of insured machinery and plant. It is designed to fill gaps where standard property insurance may not respond, such as internal mechanical damage or electrical arcing.

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Is equipment breakdown the same as boiler & machinery insurance?

The terms are often used interchangeably. Some insurers call it “engineering breakdown” or “boiler and machinery”. The core concept is cover for sudden mechanical/electrical failure, with optional extensions for spoilage and business interruption.

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Does it cover refrigeration and cold rooms?

Yes, refrigeration plant can often be included. You can also add spoilage/deterioration cover so that stock losses caused by an insured breakdown (such as chiller failure) are included, subject to policy terms and limits.

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Will it cover production downtime?

You can add equipment breakdown business interruption cover to protect your gross profit when an insured breakdown stops production. This is separate to standard BI, which usually requires property damage like fire or flood.

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What isn’t usually covered?

Policies generally exclude predictable wear and tear, gradual deterioration, corrosion, and poor maintenance. Coverage is typically aimed at sudden and accidental breakdown events. Always check the specific wording and exclusions.

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How much equipment breakdown cover do we need?

It depends on the replacement value of your key equipment and the potential severity of associated losses. Many businesses insure the full replacement value of critical plant and then add suitable limits for expediting expenses, spoilage, and BI.

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Does equipment breakdown insurance help with emergency repairs?

Many policies cover reasonable repair costs and can include expediting expenses such as overtime or emergency shipping, helping you restore operations faster, subject to the cover selected and policy limits.

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What do you need to provide to get a quote?

We typically need a summary of your operations, an overview of key equipment and approximate values, details of maintenance/servicing, and whether you want spoilage and equipment breakdown BI. If you have temperature monitoring or redundancy for critical plant, that can help too.

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