Financial protection for machinery breakdowns and how to prevent them

< Back

2025 October 20

Whether you are running a manufacturing operation, or even sit in a commercial office, the breakdown of a key piece of machinery can have large financial ramifications.

Imagine, for example, running a restaurant and your fridge breaks down spoiling all your food or a key piece of machinery fails in the middle of a manufacturing run. It is not of course just any spoilage costs but the cost to repair or replace equipment along with lost productivity and potential revenue.

You may think your Material Damage insurance policy would cover such an incident, but this is rarely the case unless it has been specifically included.  What you actually need is Machinery Breakdown insurance.

What does Machinery Breakdown cover provide?

Machinery Breakdown insurance is designed to cover the sudden and accidental failure of essential equipment. This includes:

• Air conditioning units
• Refrigeration and freezer units
• Electrical panels and generators

Unlike standard property insurance, which typically covers external events like fire or theft, Machinery Breakdown focuses on internal mechanical equipment failures that cause damage and disruption to your equipment and therefore your operations.

How to prevent breakdowns

While insurance provides financial protection, prevention is always better and cheaper than the cure.  Having a robust training and maintenance programme will prevent claims in the first place, which in turn will reduce your premiums.

Here are some proactive steps that can be taken:

• Regular maintenance
  Ensure there is a scheduled maintenance programme for all critical machinery. This will reduce wear and tear, identify issues early, and minimise claims.
• Install alarms and monitoring systems
  Temperature alarms in refrigeration units can alert your staff to issues before spoilage occurs.
• Staff training
  Ensure your team knows how to respond to equipment failures and what to do to minimise the impact.
• Keep spare parts on hand
  If possible, keeping critical components like thermostats or compressors on site can reduce downtime and speed up repairs, and more importantly a loss of business.

If you are unsure about whether you have Machinery Breakdown cover as part of your insurance programme, or even whether you have sufficient cover let us know.

We are here to help

Please contact us if you would like our assistance.