EQUIPMENTBREAKDOWN INSURANCE
BOILERS, ELEVATORS, HVAC, FIRE PUMPS, AND GENERATORS — WHEN THEY FAIL INTERNALLY, PROPERTY DOESN'T COVER IT.
INTERNAL MECHANICAL FAILURE IS EXCLUDED FROM STANDARD PROPERTY POLICIES.
Property insurance covers fires, storms, and water damage — external perils acting on the building. When a boiler ruptures from internal pressure, an elevator motor burns out, or an HVAC compressor seizes, the cause is internal mechanical or electrical failure. Standard property policies exclude this. Equipment breakdown fills the gap.
Boiler ruptures, pressure vessel failures, and steam system breakdowns in heating plants.
Motor burnout, control failures, hydraulic leaks, and mechanical wear in elevator systems.
Compressor seizure, refrigerant system failure, and cooling tower breakdowns.
Transformer failures, panel shorts, and internal surge damage to electrical distribution.
TAP EACH SYSTEM TO SEE THE BREAKDOWN EXPOSURE.
Every mechanical system in the building can fail internally. Tap each to see the coverage impact.
PROPERTY COVERS EXTERNAL PERILS. BREAKDOWN COVERS INTERNAL FAILURE.
A fire that destroys the boiler room is a property claim. A boiler that ruptures from internal pressure failure is an equipment breakdown claim. The property policy pays for the fire. The equipment breakdown policy pays for the mechanical failure. Without equipment breakdown, the association absorbs the full cost of internal failures — and in a high-rise with elevators, fire pumps, emergency generators, and HVAC systems, a single equipment failure can produce a six-figure loss before the replacement is even ordered.
Kelly Insurance Group reviews the association's mechanical inventory and ensures equipment breakdown limits cover the actual replacement cost of the systems installed — including the aging equipment in older buildings where replacement parts are harder to source and more expensive.
EQUIPMENT BREAKDOWN — ANSWERED.
WHAT DOES EQUIPMENT BREAKDOWN COVER THAT PROPERTY DOESN'T?
Property covers external perils — fire, wind, water. Equipment breakdown covers internal mechanical and electrical failures — motors burning out, compressors seizing, boilers rupturing from pressure. These internal failures are excluded from property policies.
WHAT EQUIPMENT IS MOST COMMONLY COVERED?
Boilers, HVAC, elevators, fire pumps, generators, pool pumps, gate motors, electrical panels, transformers, and fitness equipment. Any mechanical or electrical equipment the association owns and operates.
DOES IT COVER RESULTING DAMAGE FROM A FAILURE?
Yes. Both the failed equipment and the resulting damage — water damage from a boiler rupture, food spoilage from a refrigeration failure, and sometimes temporary replacement costs during the repair period.
IS ELEVATOR BREAKDOWN COVERED?
Motor burnout, control failure, cable wear, and hydraulic leaks. A single elevator replacement can cost hundreds of thousands. Equipment breakdown covers repair or replacement and associated disruption costs.
IS SEPARATE COVERAGE NEEDED OR IS IT IN THE PROPERTY POLICY?
Some property policies include basic equipment breakdown endorsements, but sublimits may be too low. Standalone policies provide higher limits and broader coverage. We review the property policy's equipment provisions and recommend standalone where needed.
DOES IT COVER ELECTRICAL SURGES FROM LIGHTNING?
Lightning damage is typically a property claim (external peril). Internal electrical faults — not caused by lightning — are equipment breakdown claims. The distinction depends on whether the cause was internal or external.
PROTECT THE MECHANICAL SYSTEMS THAT KEEP THE BUILDING RUNNING.
Kelly Insurance Group matches equipment breakdown limits to the actual mechanical inventory — not a generic sublimit. Since 1881.
The availability of coverage and eligibility for coverage can depend on numerous factors. We cannot guarantee that all customers, individuals, and businesses looking for coverage will be successful in these efforts when contacting our team. All policy coverages and terms need to be fully reviewed by the respective consumer to ensure the coverage asked for is what is specifically being quoted or provided by any insurance policy. Insurance Policies, Coverage Changes, and their terms and conditions are not bound or altered until written confirmation is provided by one of our licensed team members or underwriters. This page does not offer legal advice, legal opinions, or policy interpretations. Rather, this page is meant as a resource to help provide customers and insurance consumers with additional considerations that may help in their insurance buying or pursuit of insurance information. Kelly Insurance Group does not employ or direct attorneys.
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Disclaimer: Coverage availability and eligibility may depend on underwriting review, carrier guidelines, policy terms, state requirements, business operations, risk characteristics, and other information provided during the application or quoting process. Kelly Insurance Group cannot guarantee that every individual, customer, organization, or business seeking coverage will qualify for, receive, or successfully place insurance coverage. All policy coverages, exclusions, conditions, limits, endorsements, and terms should be carefully reviewed by the consumer, insured, or applicant to confirm that the coverage requested is the coverage being quoted, offered, or provided. Insurance coverage, policy changes, endorsements, cancellations, and other policy terms are not bound, changed, confirmed, or altered unless and until written confirmation is provided by a licensed Kelly Insurance Group team member, the applicable insurance carrier, or an authorized underwriter. This page is provided for general informational purposes only and does not provide legal advice, legal opinions, insurance coverage opinions, or policy interpretations.