Equipment Breakdown coverage is excluded from the standard commercial package insurance policy. The success of your restaurant business heavily depends on a variety of equipment, and if equipment breakdown were to occur your success and reputation could be jeopardized. This valuable coverage can be added as a stand alone policy or in some cases it can be added to your current policy by endorsement.

What will adding Equipment Breakdown cover?

The typical Equipment Breakdown policy will cover losses caused by short circuit, electrical arcing, power surges, mechanical breakdown, motor burnout, boiler damage and operator error. So take a deep breathe, because if you have equipment breakdown policy and anything goes wrong you are likely covered!

 To what extent will Equipment Breakdown coverage pay for my equipment?

Equipment breakdown insurance will not only pay for the physical damage to equipment caused by the mechanical and electrical breakdown, but also any losses due to the failed equipment. This includes:

  • Business income loss
  • Spoilage losses
  • Extra expenses to minimize the equipment loss
  • Extra expenses to expedite repairs.


Restaurant businesses rely on a range of refrigeration equipment including walk- in refrigerators and freezers, beverage coolers, and ice makers to name just a few. If your refrigeration equipment break downs it would mean a loss of product and customers.

  • A power surge damaged a restaurant’s refrigeration system. The restaurant was closed while repairs were made. The policy paid $10,000 for Physical Damage, $12,000 was paid for Business Income Loss and an additional $25,000 for Spoilage.
  • A restaurant lost refrigeration in two walk-in coolers and a freezer when a utility power quality issues damaged the compressors and motors. Equipment Breakdown paid over $30,000 in spoilage.
  • The compressors of a refrigeration shorted out. All of the dairy products and meat had to be thrown out. The Equipment Breakdown policy paid over $4,000 in spoilage as well as $140 in physical damage.


Selecting the appropriate coverage to protect the investment in your restaurant business can be a confusing process. It’s more that selecting an accurate coverage limit. There are different coverage forms, potential hazards to consider, property not normally included and numerous other options. Southern States Insurance represents several commercial property insurance carriers and we can tailor a product specific to your needs.

It is important to protect your restaurant business and Equipment Breakdown coverage needs to be thoroughly considered and discussed with your agent.

Our Georgia Independent Insurance Agency want’s to engage with you on Facebook and Twitter to answer any questions and provide you with more news, laughs, and client successes. We have been in the insurance business for 20 years handling insurance claims and providing personal service to our clients.


**For more information about commercial property insurance coverage contact Terri Krider at or call 850-837-3629