As the name implies, machinery breakdown insurance pays for the repair and replacement of machines as well as the financial losses incurred in case of a breakdown. For instance, if a power surge damages your computers halting business operations for one week, this policy will reimburse you the income lost during this time as well as cover the costs of buying new computers. Take note that equipment breakdown insurance only covers mechanical and electrical breakdowns, meaning it excludes software damage. Here’s some more information about machinery breakdown insurance in NYC.

How Does Machinery Breakdown Insurance Work?

If your business deals with heavy machinery and common office equipment such as photocopiers and computers, you should consider purchasing this policy. You will not have to pay for repairs or purchase new machines out of pocket in case of a breakdown. Your machinery breakdown policy will pay for all costs resulting from machine breakdown, provided the damage is physical.

What Machinery Breakdown Insurance Covers?

Machinery breakdown insurance covers the following equipment categories:

  • Boilers and pressure equipment
  • Mechanical equipment such as motors, elevators, engines, generators, water pumps, and manufacturing equipment
  • Computers and communications systems such as phone systems, fire alarm systems, computer systems, security systems, and voice mail systems
  • Refrigeration systems and air conditioners
  • Electrical equipment, including transformers, cables, and electrical panels

In case any of the machinery mentioned above breaks down, machinery breakdown insurance will pay for the cost of repair and replacement, lost income, spoiled inventory, and other related expenses. Common causes of machine breakdowns include natural disasters, vandalism, electrical hitches, unfavorable operating conditions, and bursting due to high pressure.

Claims Process for Machinery Breakdown Insurance in NYC

While the insurance claim process varies from one insurance provider to another, here is a look at the standard claim process to follow in case a machine breaks down.

  • Notify the insurance company via a phone call and later in writing.
  • Gather as much information about the damage as you can.
  • Minimize the extent of the damage if possible.
  • Leave every damaged part or equipment in place for investigation purposes.
  • Provide the necessary inventories and documents to support the claim.
  • At the insurer’s request, provide your ID and other documents and details needed for the settlement of the claim.

Depending on the circumstances surrounding the breakdown, the insurer can either approve or deny the insurance claim.

Documents Required for Claim Process

During the claim process, the insurance provider may ask for the following documents.

  • Proof of ID
  • Insurance policy paperwork
  • Invoice of the damaged machinery
  • A statement from the engineer detailing the nature of the breakdown


While machinery breakdown insurance is crucial for your business, it has several exclusions that are as follows.

  • Wear and tear
  • Explosions
  • Damage to replaceable tools and parts such as chains, rubber tires, belts, and ropes
  • Damage due to overload or experimentation
  • Fire, theft, vandalism, and related perils
  • Gradual damage due to negligence and a lack of maintenance

For comprehensive coverage, you can purchase riders or a commercial property insurance policy. The latter covers business property against perils and events such as fire and vandalism.

These are some of the benefits of machinery breakdown insurance. When you are ready to find reliable equipment breakdown insurance for your business, the team at Premier Risk, LLC is here to help! We serve Long Island and neighboring cities in New York. Contact us to get started today.