Electrical failure
Equipment failure resulting from electrical breakdown is, by far, the most frequent cause of loss, accounting for 65% of all equipment breakdown claims. Many factors can contribute to this form of equipment breakdown.
Equipment breakdown
Everything breaks down eventually. But when the equipment that businesses and families depend on stops working, the effects can range from inconvenience, to loss of revenue or even business failure. Comprehensive Equipment Breakdown Coverage is a critical endorsement for any property policy.
What is equipment breakdown?
Equipment breakdown occurs when electrical or mechanical equipment stops working unexpectedly as a result of some catastrophic failure not associated with normal wear and tear. Equipment breakdown can affect commercial businesses, farming operations, as well as homeowners, and is classified into three categories or perils:
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Mechanical failure
Mechanical breakdown is the second most common form of equipment failure. It accounts for 30% of all equipment breakdown claims yet results in a disproportionate 40% of loss in terms of total cost. This is due largely to the types of equipment involved. -
Pressure system failure
Pressure system breakdown accounts for just 5% of all equipment breakdown claims. That doesn't make it any less disruptive for commercial businesses, farming operations, or homeowners when it occurs.
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Modern coverage for modern exposure
As technology advances and becomes more integrated into our everyday lives, equipment breakdown becomes increasingly disruptive. In addition, the more advanced the technology, the more complex and expensive it is to repair or replace. Most property policies don’t cover equipment breakdown. However, an equipment breakdown endorsement will protect the property identified in the underlying policy.
What鈥檚 at stake?
These charts demonstrate just how often equipment breakdown occurs, as well as the severity of costs associated with each peril.
Frequency of breakdowns
Electrical
65%
Mechanical
30%
Pressure
5%
Severity of breakdowns
Electrical
53%
Mechanical
40%
Pressure
7%
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Learn more about electrical breakdown