Can I get coverage for equipment breakdown?

Complete Guide to Equipment Breakdown Coverage

Why This Question Matters for Colorado and Utah Residents

For business owners in Colorado and Utah, your operations rely on specialized equipment—whether it's manufacturing machinery in Denver, walk-in coolers in Salt Lake City, or printing presses in Fort Collins. Unexpected mechanical or electrical failures can lead to crippling repair costs and lost revenue, especially in regions with extreme weather patterns like hail, power surges, and winter storms. Local businesses routinely face:

• Costly downtime and repairs: Equipment failures can result in thousands (sometimes hundreds of thousands) of dollars in losses—not including lost business while repairs are made.
• Weather-driven risks: Colorado ranks #2 nationally for hail claims, and power surges in both states often damage HVAC and refrigeration systems just as business peaks in the summer.
• Coverage gaps: 67% of businesses lack adequate business interruption protection and may not realize basic property policies do not cover equipment breakdowns unless specifically added.

What Most People Get Wrong

A common misconception is thinking commercial property insurance automatically covers equipment breakdowns. In reality, standard policies generally cover damage only from external events (like fire or theft), not internal equipment failures.

Another misunderstanding is assuming all damages—including general wear and tear or gradual deterioration—will be covered. Equipment breakdown coverage is specifically for sudden and accidental mechanical or electrical incidents, not routine maintenance or aging.

The Complete Picture

Equipment breakdown coverage can be added to most commercial property policies in Colorado and Utah for a modest premium—often $15 to $50 per month extra, depending on your business type and the value of your equipment. This endorsement pays for the repair or replacement of essential machinery after a covered breakdown (think HVAC, boilers, refrigeration units, computers, production machinery, and more).

Typical claims might include electrical surges after a spring thunderstorm in Boulder that fry a restaurant's freezer ($25,000+), or a power surge disabling a print shop's press in Provo. Covered losses often far exceed the annual cost of the endorsement, with insurance companies required by Colorado law to pay valid claims within 60 days.

For many businesses, adding this coverage means the difference between a minor hiccup and a devastating, long-term setback. Local agents, familiar with Colorado and Utah-specific risks, help ensure your policy matches your actual exposures. Regularly reviewing your policy and equipment inventory ensures your limits keep pace as your business grows or technology evolves.

Making the Right Decision for Colorado and Utah Residents

Question 1: What equipment does my business rely on most—and what would it cost to repair or replace if it suddenly failed?

Take an inventory of all essential equipment, from computers and point-of-sale systems to specialty machinery and refrigeration. Know their current value and expected maintenance needs.

• Would a sudden breakdown force your business to close or lose substantial revenue?
• Are certain machines (like HVAC in a Salt Lake City hotel) critical during peak seasons?

Question 2: Is wear and tear excluded—and would a claim be covered?

Equipment breakdown coverage applies to unexpected, accidental failures—not gradual wear and tear or neglect. Make sure you understand the policy’s definition of “breakdown” and any exclusions for pre-existing conditions.

Question 3: Have recent changes increased my equipment risks?

Updating your technology, expanding your kitchen, or adding new production lines? Regularly review your policy with your FoCoIns advisor to keep limits and equipment lists current—especially if your operations have grown or you’ve added specialized systems. Local agents will consider regional risks like hail, wildfires, or recurring power surges that might heighten your exposure.