Whether you are a general or specialized contractor, you probably know that it’s important to keep all of your projects on schedule and within budget. Any setback might put a dent in those plans, but you likely know that you can’t avoid every risk of something potentially going wrong.  

For instance, an unexpected problem with your tools or equipment alone could lead to thousands of dollars’ worth of additional setbacks. As a result, you want to do all you can to protect the project and its financing, even when the work grinds to a halt.  

One of the ways to do so is to is to ensure you have equipment breakdown insurance as part of your business insurance portfolio. This is a very specific type of coverage designed to protect you when unexpected mechanical failures threaten your work. 

Contractor Equipment Insurance—What It Won’t Cover 
Most contractors have both property & builder’s risk insurance policies that will cover their machinery and equipment in case of unanticipated losses or damage. However, this coverage will not insure all types of damage that machinery might sustain. 

Suppose that while you are in the process of constructing a new home, a severe storm hits the area. During the high winds, a portion of the structure collapses, crushing several essential pieces of equipment beneath it. Under the circumstances, your commercial property insurance will help you cover the costs of repairing or replacing the damaged equipment. 

However, equipment might fail even when it’s sunny out. Suppose that one day, an electrical surge causes your generator to short-circuit, essentially forcing operations to halt. Standard equipment insurance usually excludes such electrical damage, so it might not pay for your saw’s damage. This might be a case for equipment breakdown insurance to help out.  

Expand Protection With Equipment Breakdown Insurance 
An unexpected or unavoidable failure might occur in one of your essential machines at any time. As long as you could not have reasonably foreseen or prevented this problem from occurring, then your equipment breakdown coverage will most likely be able to help you out.  

The case of a power surge suddenly frying a generator is a good example of when your equipment breakdown coverage might be able to step in. It might help your business pay for: 

• The costs to repair damaged machinery. 
• Replacement costs of completely-destroyed items. 
• Income lost during the operational shutdown. 
• Certain other essential costs you incur during the shutdown. 

What’s important to remember is that you must speak to your insurer about the precise value of certain equipment, and how you plan to use it. To help you tailor your equipment breakdown coverage, they will want to get a better idea of exactly what type of risk they are taking by investing in you.