Equipment Breakdown — The Gap in Every Property Policy.
HVAC, boilers, elevators, electrical and mechanical systems. Standard property forms cover fire and storm — not the day a boiler or compressor simply fails. This line does, and it's cheaper than the first claim it pays.
What equipment breakdown covers
Equipment breakdown (historically "boiler & machinery") pays for sudden, accidental physical damage to building systems and the resulting losses. That includes the damaged equipment itself, plus the cascade — spoiled contents, lost rents while the system is down, and expediting expense to get it running.
| HVAC & chillers | Compressor failure, motor burnout, refrigerant systems. |
| Boilers & water heaters | Pressure-vessel failure, rupture, related damage. |
| Elevators | Mechanical and electrical failure of lift systems. |
| Electrical | Transformers, panels, service equipment — arc and short-circuit damage. |
| Pumps & building systems | Sump, booster, and circulation systems that keep the building habitable. |
The gap it fills
Standard property policies respond to external perils — fire, wind, water from a storm. They specifically exclude mechanical breakdown, electrical arcing, and the internal failure of the equipment itself. So when a 15-year-old boiler cracks or a rooftop compressor seizes in July, the property policy says no. Equipment breakdown says yes, and picks up the spoiled tenant property and lost rents that follow.
Who needs it most
- Multifamily with central systems — shared boilers, elevators, and HVAC are single points of failure that take rent down with them.
- Commercial and mixed-use — tenant operations depend on building systems; an outage is a business-income event.
- Older buildings — aging mechanicals fail without an external peril, exactly the scenario property excludes.
- Any building with refrigeration or sensitive tenant contents — the spoilage coverage alone can justify the line.
What it typically costs
Often $150–$600/yr depending on the systems and building size, and frequently bundled into the property placement. We'll tell you when it's already embedded in your form and when it's a separate endorsement worth adding.
FAQ
Isn't this already in my property policy?
Sometimes a limited version is, but the core property form excludes mechanical and electrical breakdown of the equipment itself. We check whether your policy includes equipment breakdown and at what limit, and add or raise it where the building's systems warrant.
Does it cover the spoiled food in a tenant's restaurant?
Equipment breakdown can cover spoilage resulting from a covered breakdown, subject to the policy's terms and any sublimit. For buildings with refrigeration-dependent tenants, that coverage is often the reason to carry the line.
What about lost rent while the elevator is out?
If a covered breakdown makes units untenantable, the resulting loss of rents/business income can be covered. We coordinate the equipment breakdown limit with your loss-of-rents structure so the two line up.
Is wear and tear covered?
No. Equipment breakdown covers sudden, accidental failure, not gradual deterioration or lack of maintenance. Keeping systems maintained is both good practice and a condition of coverage.
Close the gap your property policy leaves open.
We'll tell you whether equipment breakdown is already in your form and where it's worth adding — and quote the delta. One intake covers the whole stack.