A (Far from Complete) List of Equipment That Small Businesses Need to Insure

Did you know that there are over 33.2 million small businesses in the US alone? They range from small-scale manufacturers to bakers and more. However, these small businesses, too, have to deal with the nuances of insurance, even if there are no employees apart from the owner.

As it stands, there are four major coverages, including property insurance, liability insurance, business auto insurance, and workers’ compensation insurance for small businesses.

But there is one area that small businesses frequently ignore: equipment breakdown insurance. Insurers know that this segment has strong market potential and is expected to grow at a CAGR of 15% by 2028, with a valuation of USD 120 billion. The urgency and the significance of equipment breakdown insurance are amply demonstrated by this.

However, it’s noteworthy that certain types of equipment can only be insured against specific faults. Let’s take a quick look at them.

What Small Business Equipment Need Insurance and Why?

Equipment breakdown coverage helps secure assets and lower wear and tear costs during routine operations. It is a great way to cover the losses due to sudden equipment damage and the subsequent repair work. The coverage even insures businesses against the financial losses that can happen due to ceased operations. Most importantly, with this insurance, the chances of you being out of business due to faulty equipment are cut short due to speedy repairs or replacements.

To that end, it’s worth noting that while property insurance can safeguard the belongings, it cannot guarantee against unforeseen accidents breaking down the necessary machinery. 

Here is the list of equipment that can be covered in the equipment breakdown coverage:


Boilers can lead to serious hazards when not used by trained professionals or if the upkeep is not up to the mark. Explosions, maintenance mistakes, and other events are some of the potential causes of accidents. As boiler rooms contain hazardous materials, they are highly prone to accidents. This could have a detrimental impact on the entire facility, making the trouble caused by even a minor flaw extremely problematic for the business.

Electrical Equipment

Damages due to electrical equipment are always a matter of serious concern. Faulty installation, exposed electrical parts, or loose wiring can lead to accidents. The probability of explosions can’t also be warded off, as they can impact not just the device in question but the nearby areas and inventory as well. 

Air Conditioners, Refrigerators, Computers, and Phone Systems

Refrigerators and air conditioners are used in bakeries and restaurants to keep food products and ingredients at the right temperature. Loose wiring or short circuits can lead to the malfunctioning of these accessories. Power outbreaks can be another reason for sudden appliance damage. The same goes for computers and phone systems. When they malfunction, operations can come to a screeching halt.

Production Machinery

When production equipment breaks down, it can be a major roadblock in the company’s progress. Even small equipment breakdowns can have huge repercussions. The type of machinery installed in the small business unit may influence the causes of production machinery failure. General causes include mishandling, over- or under-maintenance, sudden power cuts, etc.

Security Systems

Security systems can become faulty for multiple reasons. These may include but are not limited to faulty power plants, faulty lines, battery failure, system inconsistency, etc. In any such case, repair work is needed, which can be covered in equipment breakdown coverage.

Important Considerations

Equipment breakdowns that happen due to the machine’s age might not be covered in this insurance policy. But issues such as electrical shorts, failures, burnouts, or power surges can help businesses claim for repair or replacement. Additionally, the equipment breakdown coverage can shield others from external losses. This gives all-around protection to the business against equipment malfunction.

The average premium for this insurance can be evaluated based on the kind of business you own. This includes but is not limited to the size of the business, the equipment in question, and other coverage your small business holds.

Many times, small businesses need a customized quote for their business. However, due to a cumulative package, they end up paying more while not ensuring enough coverage. This must change!

Gonzalez Insurance, upon the assessment of your business, works diligently to design customized equipment breakdown coverage tailored to meet all your needs. Get in touch with us today for a quote.