The hospitality industry – including restaurant establishments – has a critical need for Equipment Breakdown insurance. A breakdown in equipment caused by a mechanical breakdown, power outage, short circuit or other malfunction can affect the business’ operation and bottom line.
For instance, a power outage could prevent a restaurant from preparing and cooking food for its visiting patrons as well as shut down its online order service, resulting in significant loss of income. Or, if the compressors in a restaurant’s refrigeration unit shorts out overnight, all its food provisions will have to be thrown out. Not only does the restaurant have the cost to repair or replace the refrigeration unit but also the cost to replace the spoiled food. Additionally, there may be lost income while the refrigerator and its contents are being replaced.
In our info sheet, “Understanding Restaurant Coverage: Equipment Breakdown,” we review the specific coverages available in the Equipment Breakdown insurance component in our Restaurant Package.
It’s important for clients to understand that Property insurance policies typically do not cover business equipment unless specifically added, as in the case with our Restaurant Package. In addition, while having warranties on business equipment can be helpful, most warranties only cover new equipment for a brief period of time. Commercial Property insurance also does not cover any lost business income encountered due to equipment breakdown, which is why Equipment Breakdown insurance is required.