Protect Your Restaurant: Why You Need Equipment Breakdown Coverage

As a restaurant owner, you’ve invested your time, money, and passion into building your business. You’ve selected high-quality commercial equipment to craft delicious meals and provide top-notch service to your customers. But what if that expensive equipment unexpectedly breaks down? The costs to repair or replace vital equipment like ovens, refrigerators, and dishwashers could be catastrophic and put you out of business. That’s why you need equipment breakdown coverage. This specialized insurance protects your livelihood in the event of a sudden mechanical or electrical failure of the equipment you rely on. For a small premium, you’ll have peace of mind knowing you’re shielded from unexpected and potentially ruinous repair or replacement costs. And you can focus on what matters: keeping your customers happy and your business thriving.

What Is Equipment Breakdown Insurance?

Equipment breakdown insurance protects your business in the event that your critical equipment suffers a mechanical or electrical breakdown. This coverage helps ensure your operations get back up and running quickly.

What does it cover?

  • Equipment breakdown insurance covers the cost to repair or replace equipment like:

  • Kitchen appliances: ovens, stovetops, refrigerators, etc.

  • Heating and cooling systems: air conditioners, furnaces, etc.

  • Electronic systems: point of sale systems, security systems, etc.

It can also help pay for income loss and expenses incurred during the breakdown. For example, if your oven breaks down, it may cover the cost of outsourcing baking to another company or refunding customers.

Why do you need it?

Equipment failures can be extremely costly. Replacing industrial equipment often costs tens or even hundreds of thousands of dollars. And downtime can lead to loss of revenue, unhappy customers, and damage to your reputation.

Equipment breakdown insurance lets you know these potentially catastrophic events won’t financially ruin your business. The premiums are often quite affordable, especially considering the costs of a major equipment failure. It’s a smart investment in your restaurant’s financial security and stability.

With the right coverage and limits, you can rest easy knowing that your critical equipment is protected and your business will stay up and running even if the unexpected occurs. After all, in the restaurant industry, your equipment keeps the lights on and the ovens burning. Equipment breakdown insurance helps ensure it stays that way.

Why Restaurants Need Equipment Breakdown Coverage

Equipment breakdowns can be devastating for any restaurant. As an owner, you know how much is riding on keeping operations running smoothly. That’s why equipment breakdown coverage is so important.

With this coverage, you’ll be protected in the event of unexpected equipment failures like:

  • Refrigeration or freezer units are going down, spoiling inventory. Repairing or replacing these units and restocking food can cost tens of thousands.

  • Issues with cooking equipment – ovens, stovetops, or grills – disrupting service. You could face lost revenue, refunds, and repairs.

  • Malfunctions of dishwashers, ice machines, or POS systems create chaos. The inability to serve customers or process payments and orders greatly cut profits.

  • Damage to walk-in coolers or freezers from power surges or electrical failures. The loss of temperature control risks food safety violations, wasted stock, and business interruption.

  • Plumbing or wiring problems damaging equipment or the building. Water damage, in particular, is a huge threat and can be remarkably expensive to remediate.

As you can see, any number of scenarios could impact your ability to operate and generate income. But with equipment breakdown coverage, you’ll have financial protection to get your systems back up and running as quickly as possible. The premiums are affordable, often only 1-3% of equipment values, providing security and peace of mind that your business – and livelihood – are shielded from the unexpected.

Isn’t your restaurant’s future worth the investment? Equipment breakdown insurance helps ensure it will be there for years to come.

The Costs of Equipment Failure Can Cripple Your Business

Equipment failure can be devastating for a restaurant. When your walk-in fridge, industrial oven, or point-of-sale system goes down, it impacts your ability to serve customers and cuts your revenue and profits. The costs associated with repairing or replacing critical equipment can be crippling for small business owners.

1. Repair and Replacement Expenses

The average restaurant equipment repair bill is $1,500, but it can easily exceed $10,000 for major appliances. Complete replacement of an item like a refrigeration unit, stove, or cash register system can cost between $5,000 to $50,000 or more, depending on the size and features. As a restaurant owner, these unplanned capital expenses can take time, especially if you must shut down operations for any period.

2. Lost Revenue

When your equipment fails, and you can’t operate as usual, you lose money every hour you’re closed or limited. Customers who can’t get their meals or regular items may go elsewhere, impacting your short- and long-term sales. According to industry statistics, just one hour of downtime in a restaurant can result in a $3,000 loss or more, depending on the food served. For some full-service restaurants, a single day of closure due to equipment issues can mean losing $10,000 to $30,000 in revenue.

3. Unhappy Customers

Equipment problems also lead to unsatisfied customers, especially if there are significant delays in service or limited menu options. Regular diners may lose confidence in your establishment, and bad reviews on sites like Yelp or TripAdvisor can turn away potential new customers. Angry guests often don’t return and frequently tell others about their negative experiences.

As you can see, equipment breakdowns pose serious financial and operational risks for any restaurant. Investing in equipment breakdown coverage helps protect your business from unexpected repair and replacement costs if critical equipment fails. For most restaurant owners, peace of mind and financial security are worth the investment.

What Equipment Breakdown Insurance Covers

Equipment breakdown insurance covers the sudden and accidental mechanical or electrical breakdown of nearly all types of equipment in your restaurant, like:

  • Stoves, ovens, grills, and other cooking equipment

  • Refrigerators, freezers, and ice machines

  • Air conditioning and heating units

  • Electronic equipment like cash registers, computers, and phone systems

Basically, if it has moving parts and is essential to running your business, equipment breakdown insurance will cover its repair or replacement in the event of a failure.

What’s Covered

Equipment breakdown insurance covers the cost to repair or replace your equipment after an unexpected mechanical or electrical failure causes it to break down. This includes:

  • The cost of parts and labor to get your equipment back up and running.

  • Loss of income or extra expenses as a result of the breakdown. For example, if your walk-in freezer fails, you must dispose of spoiled food or rent a replacement.

  • Costs for temporary equipment rental so you can stay open while waiting for repairs or replacement equipment.

  • Expediting expenses like rush delivery fees to get replacement parts as quickly as possible.

  • Code upgrade coverage in case building codes have changed since your equipment was originally installed.

What’s Not Covered

While equipment breakdown insurance covers a wide range of scenarios, there are some notable exceptions:

  • Wear and tear or gradual deterioration over time. The failure must be sudden and accidental.

  • Lack of maintenance or negligence. You must service your equipment regularly as recommended by the manufacturer.

  • Cosmetic or superficial damage that doesn’t impact function.

  • Loss caused by other events like fire, flood, vandalism, or theft. Separate insurance policies would apply in those situations.

Equipment breakdown insurance provides affordable peace of mind that your essential business equipment will continue humming. Talk to your insurance agent today about adding this important coverage to your commercial policy.

How to Purchase Equipment Breakdown Insurance for Your Restaurant

To purchase equipment breakdown insurance for your restaurant, take the following steps:

1. Meet with an independent insurance agent who specializes in commercial insurance. You need coverage for potential mechanical or electrical equipment breakdowns like ovens, refrigerators, dishwashers, and HVAC systems.

2. Review quotes from multiple insurers. Compare deductibles, coverage limits, and premiums. Look for a policy that covers the full replacement cost of your equipment in the event of a breakdown. Higher deductibles typically mean lower premiums, so choose a deductible amount you can afford if you ever need to file a claim.

3. Check the specific equipment covered under each policy. The best policies cover boilers, refrigeration units, cooking equipment like ovens and stoves, plumbing and electrical systems, and more. Make sure any expensive or essential equipment is explicitly covered.

4. Consider optional coverage add-ons like business interruption insurance which covers lost income if you have to close temporarily, and food spoilage coverage for the cost of any food ruined by equipment failure. These add-ons provide extra protection for restaurants.

5. Once you choose a policy, the insurer will schedule a time to inspect your facility and equipment. They must evaluate the equipment’s condition and age to underwrite your policy properly. After the inspection, your policy will take effect.

6. Review and renew your policy annually. Update the insurer on any equipment upgrades or replacements to ensure adequate coverage. Pay premiums on time to keep the policy active and make any claims within the required period should equipment break down.

7. Purchasing equipment breakdown insurance may seem unnecessary, but for a restaurant, it’s essential protection against potentially catastrophic losses from events outside your control. With the right policy, you’ll know your business is properly insured.


You work hard every day, making your restaurant thrive. After putting in so much time, money, and effort, the last thing you want is for it all to go down the drain due to an equipment failure. Commercial refrigerators, ovens, and other machinery are essential for your business, but they only last for a while. You could face costly repairs or temporary closure when they inevitably break down. The financial burden and loss of revenue can be devastating.

Take your restaurant’s success seriously. For a small monthly premium, equipment breakdown coverage provides affordable protection from unexpected equipment failures. If the worst does happen, your policy can help cover repair and replacement costs so you can get back to business as usual. You have so much on the line – your time, investment, employees, and customers. Protect it all with an equipment breakdown policy and gain peace of mind that your restaurant will keep running no matter what.