My Account
We compare quotes from leading insurers
BREAKDOWN INSURANCE THAT KEEPS SEMICONDUCTOR PRODUCTION MOVING
Why Machinery Breakdown Cover Matters in Semiconductor Manufacturing
Semiconductor manufacturing is built on precision equipment and tightly controlled processes. Whether you operate a wafer fabrication plant (fab), an assembly & test facility (OSAT), or a mixed electronics manufacturing site, a single failure inside a critical machine can stop an entire line. Unlike traditional property losses, equipment breakdown incidents often happen without warning: a motor bearing fails, an inverter trips, a chiller loses efficiency, a PLC control card fails, a vacuum pump seizes, a power supply goes out of tolerance, or a compressor overheats.
Machinery & equipment breakdown insurance (sometimes called engineering insurance) is designed to respond to sudden and unforeseen physical damage to machinery and electrical equipment, including mechanical and electrical breakdown. It’s particularly important for semiconductor sites because the largest losses are rarely the repair bill alone — the real cost is downtime, WIP spoilage, missed shipments, overtime, subcontracting, expedited parts and engineer callouts, plus potential contractual consequences when customers rely on delivery windows.
Insure24 arranges specialist breakdown programmes tailored to semiconductor risks: high-value tools, sensitive utilities, critical HVAC and process cooling systems, compressed air and nitrogen systems, vacuum plant, robotics and automation, metrology equipment, and control systems that run the factory. We’ll help you define what is “critical”, schedule high-value items properly, and align breakdown cover with your property and business interruption programme so that you don’t end up with gaps at the worst possible moment.
What Machinery Breakdown Insurance Covers
Machinery and equipment breakdown cover typically responds when there is sudden, accidental physical damage to equipment arising from breakdown, failure or malfunction. In manufacturing environments, this can include a wide range of scenarios — from mechanical failure in moving parts to electrical arcing or burnout, control system faults, and pressure system incidents.
In semiconductor operations, equipment breakdown is often intertwined with process stability. Even when the initial damage is localised (for example, a chiller compressor failure), the operational impact can be extensive: temperature drift can cause rework or scrap, humidity instability can compromise moisture-sensitive devices, and a loss of vacuum quality can affect deposition or etch outcomes. The right breakdown policy is therefore built around both the equipment schedule and the way your plant actually operates.
- Mechanical breakdown (bearings, pumps, gearboxes, motors, spindles, drives)
- Electrical failure (short circuit, arcing, burnout, transformer failure, power supply failure)
- Control system faults (PLC, servo drives, sensors, control boards, inverters, SCADA components)
- Pressure plant incidents (where applicable) including sudden failure of vessels and systems
- Failure of utilities plant supporting production (chillers, compressors, vacuum plant)
- Damage during operation, maintenance or testing (subject to policy terms)
- Optional: hire of temporary plant or equipment to keep production moving
- Optional: expediting expenses (express shipping, engineer travel, overtime)
Semiconductor Equipment Typically Included
The correct approach depends on whether you want “blanket” breakdown cover for plant and machinery, a schedule of named high-value items, or a hybrid programme where critical tools are specifically scheduled and lower-value items are covered as part of a general engineering section. In semiconductor environments, scheduling is often recommended for high-value or high-criticality assets.
Packaging and test facilities may focus on ATE systems, handlers and automation; fabs may focus on utilities plant, vacuum and gas systems, and process tools. Many sites run shared infrastructure that is just as important as the process equipment itself.
Process Tools & Production Equipment
- Etch, deposition and process chambers (where appropriate)
- Vacuum pumps and vacuum distribution plant
- Wet benches, pumps and circulation systems
- Robotics, conveyors and automated handling
- Inspection, AOI and metrology equipment
- Bonding, moulding and singulation machinery
- Burn-in ovens and environmental chambers
Utilities & Critical Site Infrastructure
- Chillers, cooling towers and process cooling loops
- Compressed air systems and dryers
- Nitrogen generation/storage systems
- Electrical switchgear, UPS systems and transformers (where insurable)
- HVAC plant supporting controlled environments
- Deionised water systems (where applicable)
- Building management and monitoring controls
Downtime, Throughput & Extra Expense
Equipment breakdown insurance can be structured to cover more than the cost to repair or replace damaged machinery. For semiconductor manufacturers, the business impact is often dominated by downtime. A failed chiller can stop multiple process steps. A malfunctioning handler can choke final test. A control system issue can cause erratic performance that creates yield loss or rework, even if the machine “sort of works”.
That’s why many manufacturing programmes include a form of “machinery breakdown business interruption” or “loss of profits” (depending on market and wording) — plus extra expense cover to allow you to spend money to reduce the overall loss. The objective is speed: restoring stable operation quickly and protecting customer delivery commitments.
A strong submission clearly explains your bottlenecks (single points of failure), your resilience measures (redundancy, spare capacity, maintenance strategy), and your realistic repair lead times. We help you present this properly to underwriters, which can improve pricing and reduce restrictive conditions.
- Loss of gross profit / contribution from breakdown-related downtime (where arranged)
- Extra expense to mitigate downtime (overtime, temporary equipment, outsourcing)
- Expediting costs (express freight, engineer travel, emergency parts sourcing)
- Mitigation spend to avoid scrap and stabilise environmental conditions
- Claims preparation support (documentation and loss quantification)
- Optional: dependent utility interruption considerations (where available)
- Optional: spoilage/WIP impact following insured breakdown events (subject to wording)
Common Breakdown Scenarios in Semiconductor Sites
Underwriters will typically look for evidence of a structured maintenance strategy, condition monitoring on critical plant, and robust environmental and power-quality controls. The following scenarios are common drivers of breakdown incidents and consequential losses in semiconductor manufacturing and electronics production.
- Chiller compressor failure leading to process shutdown
- Vacuum pump seizure, oil contamination or loss of vacuum stability
- Compressor breakdown causing loss of clean dry air / instrument air
- Electrical arcing or burnout in control cabinets and drives
- PLC/control board failure causing line stoppage or unstable operation
- Switchgear/UPS malfunction resulting in unplanned outages
- Bearing and motor failures in high-duty equipment
- Robotics faults and automation stoppage in handling systems
- Cooling water quality issues causing scale/corrosion and plant failure
- Sensor drift and interlock failure leading to equipment trip events
Key Underwriting Information (What Insurers Will Ask)
Machinery breakdown programmes are underwritten on engineering fundamentals. Insurers want to understand your machinery values, criticality, maintenance and resilience. They also want confidence that a loss can be contained and that downtime is not open-ended. The better the information you provide, the easier it is to secure broad cover and competitive terms.
Insure24 helps you prepare a clear underwriting pack that reflects semiconductor realities: long lead times for specialist spares, the impact of environmental drift on product, and how you manage contractors and OEM service agreements. This reduces back-and-forth with insurers and speeds up placement.
Typical Insurer Questions
- Equipment schedule: age, value, make/model, maintenance regime, OEM support
- Utilities resilience: N+1 chillers, UPS/generator capacity, redundancy strategy
- Condition monitoring: vibration analysis, thermal imaging, oil analysis
- Power quality controls: surge protection, harmonics, UPS design and testing
- Spare parts strategy: critical spares held, vendor lead times, sourcing plans
- Incident response: shutdown procedures, escalation, service contracts
- Loss history: breakdown claims, near-misses, recurring defects and improvements
- Process sensitivity: WIP exposure, environmental tolerances, recovery times
How We Help Strengthen Your Position
- Define critical assets and realistic maximum foreseeable loss (MFL)
- Match deductibles and waiting periods to actual downtime scenarios
- Ensure the engineering section dovetails with property and BI cover
- Reduce avoidable exclusions by clarifying maintenance and controls
- Present resilience measures in a way underwriters understand
- Support claims-readiness: documentation, logs, maintenance records
- Advise on improvements that can reduce premium over time
- Negotiate practical terms for specialist equipment and long lead times
Why Choose Insure24
Semiconductor manufacturing risks don’t fit “generic” breakdown templates. The critical path is different for every site, and policy wording matters. We focus on practical coverage that responds when you need it — and on making sure your risk presentation is strong enough to achieve the best market outcomes.
- Specialist broking support for high-value manufacturing and engineering risks
- Clear equipment scheduling and valuation guidance
- Breakdown cover aligned with business interruption and stock/WIP exposures
- Market access and competitive pricing for complex risks
- Support when incidents occur — helping you document and present claims
- A practical approach to risk improvements that insurers value
How to Get Machinery Breakdown Insurance
Most machinery breakdown placements are improved by doing two things well: (1) capturing an accurate schedule of assets and critical utilities, and (2) presenting resilience and maintenance clearly. If you already have property insurance, we will also check how the policies interact to avoid gaps and overlaps.
- 1. Share your operations overview (fab, OSAT, EMS, processes and key bottlenecks)
- 2. Provide values: plant and machinery total, plus any high-value item schedule
- 3. Confirm maintenance strategy, OEM contracts and condition monitoring
- 4. Agree cover structure: breakdown, expediting, hire of plant, loss of profits
- 5. Place cover and issue documentation (plus certificate support if needed)
When a critical cooling plant failure stopped production, Insure24 helped structure breakdown and extra expense cover that funded emergency repairs and reduced downtime.
Engineering Manager, Semiconductor Manufacturing SitePROTECT YOUR EQUIPMENT
- Repair and replacement costs for sudden breakdown events
- Electrical and mechanical failure including control systems (subject to terms)
- Cover for critical utilities plant that supports production
- Optional expediting and emergency response costs
- Optional temporary equipment hire to maintain throughput
PROTECT YOUR OUTPUT
- Downtime / loss of profits extensions (where arranged)
- Extra expense to reduce overall losses and stabilise operations
- Better alignment with property BI, stock and WIP exposures
- Claims support: documentation, timelines and loss presentation
- Practical deductible and waiting period structuring
Compliance & Engineering Governance
Engineering insurers pay close attention to governance: maintenance planning, contractor controls, and safe operation of plant. Strong compliance helps protect your people and your production — and can materially improve your insurance terms.
- Planned preventative maintenance (PPM) and OEM service agreements
- Permit-to-work and contractor management
- Electrical safety controls and switchgear inspection/testing
- Pressure systems management where applicable
- Condition monitoring and incident reporting
- Spare parts management and change control procedures
- Documented resilience planning for critical utilities
FREQUENTLY ASKED QUESTIONS
+-
What is machinery & equipment breakdown insurance?
Machinery & equipment breakdown insurance is specialist engineering cover designed to respond to sudden and unforeseen physical damage to machinery or electrical equipment caused by breakdown, failure or malfunction. It can cover repair/replacement costs and, where arranged, associated downtime and extra expense.
+-
How is it different from property insurance?
Property insurance generally covers external perils such as fire, flood and storm. Breakdown insurance is focused on internal failures of machinery and electrical equipment (for example, mechanical breakdown or electrical burnout). Many businesses need both, and it’s important the wordings work together to avoid gaps.
+-
Can I include chillers, compressors, UPS and other utilities plant?
Yes. Semiconductor sites often insure critical utilities plant such as chillers, cooling towers, compressors, dryers, nitrogen systems, UPS and certain electrical infrastructure (subject to underwriting). These assets frequently represent the biggest single points of failure for production.
+-
Does it cover downtime and lost profit?
It can. Many programmes include a breakdown business interruption / loss of profits extension, plus extra expense cover to help you reduce downtime. The right structure depends on your bottlenecks, redundancy, spares strategy and realistic repair lead times.
+-
What are common exclusions?
Exclusions vary by insurer and wording, but commonly include wear and tear, corrosion, gradual deterioration, known defects, poor maintenance, and pre-existing damage. Some policies also apply sub-limits or special conditions for certain equipment types. Insure24 will help you understand the practical impact of any exclusions.
+-
What information do I need for a quote?
Typically: total plant and machinery value (and any schedule of high-value items), equipment age profile, maintenance and inspection regime, breakdown history, details of critical utilities plant, resilience measures (redundancy and spares), and whether you want downtime/extra expense extensions.