What type of insurance protects against losses due to equipment breakdown?

Equipment Breakdown Insurance is specifically designed to cover losses that arise from the malfunction or failure of equipment. This type of insurance takes into account both the repair or replacement costs associated with the damaged equipment and the potential loss of income that results from the operational downtime due to the breakdown.

It addresses machinery and equipment failures that are not typically covered under other forms of insurance, such as property or general liability insurance. General liability insurance primarily covers claims made against a business for bodily injury or property damage caused by its operations, and property insurance usually protects physical assets from risks like theft or fire damage rather than equipment malfunctions. Meanwhile, commercial auto insurance focuses on protecting vehicles used for business purposes, thus it does not extend to equipment breakdowns.

In this context, the protection offered by Equipment Breakdown Insurance is crucial for businesses that rely heavily on equipment for their operations, ensuring they can recover losses promptly and continue their activities without significant financial strain.