Practically every business relies on equipment. Regardless of how simple or complex, your equipment is critical to your business’ successful operation. For example, while an electrical panel is a very basic piece of equipment, imagine trying to operate your business without electricity.

Machinery and equipment insurance gives you financial resources to help you restore your business to full operation after an unforeseen equipment failure.


If your business uses mechanical, electrical or pressurized equipment, you need more than a property insurance policy. Standard property policies exclude losses caused by:

  • mechanical breakdown
  • electric arcing or power surges
  • explosion of steam boilers, piping, engines and turbines
  • loss or damage to steam boilers
  • loss or damage to hot-water boilers
  • indirect or consequential losses associated with the above causes

M&E coverage – also called equipment breakdown coverage – protects equipment such as transformers, electric panels, motors, air conditioning units, refrigeration units, production machinery and boilers.


M&E coverage reimburses you for expenses related to repairing or replacing covered equipment damaged by an accident. An accident is a sudden and accidental breakdown of the equipment (or a part of the equipment), manifested at the time of the breakdown by physical damage requiring a repair or replacement. Normal in-service deterioration and losses caused by corrosion or erosion are not considered to be accidents.

Mechanical breakdown loss does not stop with the repair bill. Consider the possibility of significant business interruption and consequential losses as well as extra expenses you may incur to keep your business running after a covered loss.

Your independent agent can review your company’s equipment breakdown needs and help determine how best to adequately protect your business from equipment breakdown losses.


For example, M&E insurance paid for these loss scenarios:

  • The shaft on a city water pump broke after a momentary power interruption. Repairs took a week and cost more than $20,000.
  • A nursing home’s emergency generator was damaged when the city lost electric power for two seconds. A rental generator was installed during the repairs. The repairs and rental charges totaled more than $4,000.
  • A school’s air conditioning unit was replaced when the driving motor was damaged by a power disturbance. It cost more than $15,000 to replace the unit.
  • A church’s heating boiler experienced a low-water condition. A rental boiler was used until a new boiler was installed. The rental and the new boiler cost more than $24,000.
  • An air conditioning system broke down, forcing a hotel to close. The business income loss was more than $9,000.

If your business equipment breaks down, you can be better prepared with M&E insurance.

Talk with your local independent insurance agent to find out more about machinery and equipment insurance.

These hypothetical scenarios are based on actual claims and offered for educational purposes only. Every claim is adjusted to its own specific set of facts. Whether or not insurance coverage would apply to any claims depends on the facts and circumstances of each case and the terms, conditions, and exclusions of each individual policy.

Coverages described here are in the most general terms and are subject to actual policy conditions and exclusions. For actual coverage wording, conditions and exclusions, refer to the policy or contact Landmark Risk Management & Insurance.