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INSURANCE FOR CRITICAL PLANT, ELECTRICAL SYSTEMS & HIGH-SEVERITY DOWNTIME
Why Machinery Breakdown Risk Is Often a “BI Risk” First
Machinery and equipment breakdown losses rarely stop at the repair bill. When a critical motor, gearbox, pump, compressor, PLC, drive, control panel, bearing set or pressure component fails, the most expensive impact is often lost output, delayed orders, overtime, expedited parts and specialist engineer call-outs.
Insurers assess breakdown exposure through the lens of: single-point-of-failure criticality, maintenance and inspection discipline, spares availability, electrical housekeeping, and the time it would realistically take you to recover production.
This page explains what machinery breakdown insurance can cover, how it differs from standard property cover, and how Insure24 helps you present breakdown risks in an underwriting-ready way.
What Does Machinery & Equipment Breakdown Insurance Cover?
Machinery breakdown (often called engineering breakdown) is designed to respond to sudden and accidental damage to insured plant — commonly where standard property policies exclude “mechanical or electrical breakdown”.
Cover and triggers vary by insurer and wording, so Insure24 focuses on aligning the insured item schedule and definitions to your critical equipment and realistic failure modes.
- Repair / replacement of insured plant — following sudden breakdown (policy definition applies).
- Electrical failure — motors, drives, switchgear, control panels and electrical plant (where included/scheduled).
- Mechanical breakdown — gears, shafts, bearings, compressors, pumps and rotating equipment (where insured).
- Pressure systems — boilers, air receivers and pressure plant (often subject to inspection requirements).
- Engineering inspection — some policies include (or require) periodic inspection/maintenance evidence.
- Breakdown business interruption — available on some structures to cover loss of gross profit following insured breakdown (policy dependent).
- Increased costs of working — overtime, hire plant or expedited shipping to reduce interruption (wording dependent).
- Associated damage — damage caused by the insured event to other insured parts (wording dependent).
Common Machinery Breakdown Loss Scenarios
Underwriters want clarity on how breakdown happens in your environment — and how long recovery would take. Typical breakdown scenarios include:
- Motor / drive failure — insulation breakdown, overheating, VSD faults and sudden stoppage of critical assets.
- Gearbox failure — lubrication failure, bearing collapse or misalignment causing catastrophic damage.
- Pump / compressor breakdown — impeller damage, seal failure or seizure causing loss of utilities or process flow.
- PLC / control panel incident — arcing, contamination or component failure leading to damage and prolonged recommissioning.
- Hydraulic system failure — hose burst or valve failure causing damage, contamination and extended outage.
- Cooling / chiller failure — process temperature excursions, product spoilage and downtime loss.
- Boiler / pressure plant incident — sudden damage requiring inspection, repair and statutory involvement.
- Commissioning / testing fault — integration issues causing damage during start-up or load testing.
What Underwriters Look For (and How to Improve Terms)
Breakdown is priced on preventability and speed of recovery. The same plant can attract very different outcomes depending on the evidence presented around maintenance, condition monitoring, and contingency planning.
Key pricing and appetite drivers
Criticality (single-point-of-failure assets), age/condition, operating hours, inspection and statutory compliance, the quality of your maintenance regime, and the availability of spares and competent engineers.
Examples of “quote-ready” evidence
- Asset list & values — schedule of critical plant with replacement values and locations.
- Planned maintenance — PPM schedules, service logs, contractor competence and sign-offs.
- Inspection regime — pressure plant inspections where applicable, statutory records and recommendations closed out.
- Condition monitoring — vibration/thermal monitoring, oil analysis and trending (where used).
- Electrical housekeeping — panel cleaning, segregation, thermography and overheating controls.
- Critical spares plan — long-lead spares identified and availability evidenced/tested.
- Resilience planning — bypass options, redundancy, hire plant plan and recovery timescales.
- Claims history — any prior breakdowns and controls implemented to prevent recurrence.
Common Gaps: Property Cover vs Breakdown Cover
Many businesses assume “we’re insured for machinery” because they have property insurance — but property policies commonly exclude mechanical or electrical breakdown unless an engineering section is added.
Typical gaps we help you avoid
The most frequent issues are uninsured breakdown triggers, missing assets on schedules, inadequate BI structure, and exclusions for wear-and-tear or gradual deterioration.
- Breakdown exclusion — property covers insured perils (fire/flood etc.) but excludes internal failure mechanisms.
- Wear & tear — gradual deterioration is commonly excluded; insurers want sudden, accidental triggers.
- Unscheduled critical assets — the key machine isn’t listed or values are understated.
- Inspection requirements — pressure plant often requires inspection compliance to maintain cover.
- BI mismatch — repair may be covered, but downtime loss isn’t (unless BI extensions are in place).
- Long lead times — indemnity periods that are too short for specialist parts and recommissioning.
- Electrical scope — controls and panels not included (depending on policy design).
- Maintenance evidence — weak records can reduce appetite or cause disputes at claim stage.
How to Get Machinery & Equipment Breakdown Insurance
- 1. Identify critical assets — what stops production and what it would cost to replace.
- 2. Share maintenance evidence — PPM, contractor details, inspection records and monitoring.
- 3. Confirm electrical scope — panels, drives, PLCs, motors and utilities dependencies.
- 4. Structure BI properly — gross profit figures and realistic recovery timelines (where relevant).
- 5. Place & document — align wording/schedules and issue evidence for customers and stakeholders.
“The repair cost was manageable — the real issue was downtime and delayed orders. Insure24 helped us schedule the critical assets properly and align breakdown cover with our BI exposure.”
Plant Manager, UK ManufacturerPROTECT YOUR BUSINESS
- Specialist engineering breakdown cover for critical machinery and plant
- Support aligning breakdown cover with property and business interruption exposure
- Help evidencing maintenance, inspection and condition monitoring to underwriters
- Guidance on asset schedules, values, deductibles and downtime resilience
- Fast, knowledgeable broking for industrial equipment and manufacturing risks
FREQUENTLY ASKED QUESTIONS
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What is machinery & equipment breakdown insurance?
Machinery breakdown (engineering breakdown) can cover the cost to repair or replace insured plant following sudden and accidental breakdown, subject to the policy definition, exclusions and schedule of equipment.
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Does breakdown cover electrical and control system failures?
It can, depending on the wording and what is insured. Some policies include motors, drives, switchgear and control panels, while others are narrower. We’ll align the schedule to your critical equipment.
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Is business interruption covered if a machine breaks down?
Standard BI is usually linked to insured physical damage under the property section. Some insurers offer breakdown BI extensions or separate engineering BI, but it is policy dependent and must be structured explicitly.
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Is wear and tear covered?
Usually not. Wear and tear, gradual deterioration and poor maintenance are commonly excluded. Sudden and accidental breakdown is the typical trigger, subject to the policy definition.
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What do insurers need to quote breakdown cover?
A critical asset list with values, age/condition, maintenance and inspection records, any condition monitoring, spares strategy, location hazards, and claims history. Underwriters also want clarity on single-point-of-failure exposure and recovery time.
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How quickly can Insure24 arrange cover?
Indicative terms can often be progressed quickly once equipment schedules and maintenance evidence are clear. Complex plants, pressure systems or high downtime values may require deeper underwriting — but we’ll move it forward efficiently with the right information upfront.