Protecting your business from equipment breakdowns

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Oct 12, 2018, 4:00 PM | Updated: Oct 17, 2018, 9:19 am


When you run a business, an equipment failure resulting in lost productivity translates into lost revenue.

Whether it’s a convenience store, a restaurant, a manufacturing plant, a construction site and any job in between, all kinds of equipment are used for everything from moving dirt to keeping food at the right temperature, from point-of-sales devices to wrapping and packing finished items.

Of course, air conditioning is required during Arizona’s summer to keep offices, retail outlets and warehouse bearable.

A single, unpredictable summer monsoon thunderstorm could harm a business irreparably, if its coverage does not include equipment breakdown. The danger of lightning strikes, locally heavy flooding or being hit by a microburst could blow out transformers, denying offices in affected areas electricity for days.

If you’re running a restaurant and a food cooler’s compressor goes, the risk of spoilage could cost the business thousands!

Electrical breakdown caused by power surges and arcing is a frequent type of loss Arizona businesses face during the monsoon. The result can be damage to sensitive electronic components found in most equipment, which can lead to a significant interruption of normal business operations until repairs can be made or replacements installed.

Any office building has a variety of equipment breakdown exposures, such as electrical components, transformers, switchgear and electrical distribution cables.

Perhaps the single greatest risk a large office building faces is if the air-conditioning compressors quit working. A loss of air conditioning in a multi-level office building may result in computer operation problems as well as tenant complaints. If the air is down for days or weeks, the building owner may be compelled to refund rent, which is considered a business interruption loss.

If an employer cannot afford to be down during a power outage, then a business continuity plan and a back-up generator would be recommended, according to loss control experts.

Adding equipment breakdown coverage to a commercial property policy allows the business owner to address the risk. Such coverage could include any equipment that can break down mechanically or electrically, such as:

  • Air-conditioning systems
  • Boilers
  • Computers
  • Electrical equipment
  • Phone systems
  • Refrigeration units
  • Transformers

Generally, equipment breakdown is associated with a sudden event resulting in damage such as arcing, seizing, fracturing, rupturing and bursting, causing a cease of operation. It is not the same as wear and tear, which usually occurs over time.

Damage from wear and tear usually is detected by corrosion, erosion, rusting, leaking, squeaking with declining performance, capacity or functionality. In some cases, wear and tear will result in an equipment breakdown, which is where the benefit of coverage can be realized.

Experts offer a couple of tips to help mitigate the risk, including:

  • Keeping the building’s electrical system updated
  • Performing regular preventative maintenance on electrical and mechanical systems and equipment


CopperPoint Insurance Companies offer coverages to ensure peace of mind to business owners, their employees and customers. To learn more about CopperPoint commercial coverage, such as Property with Equipment Breakdown, visit



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Protecting your business from equipment breakdowns