Why Do Businesses Need Machinery Breakdown Cover?

Machinery breakdown insurance policy is one of the most overlooked coverage that businesses tend to ignore. Many feel that having to fork out additional premiums for equipments that already cost a lot is not worth it. However, let us show you why it is important for you to have machinery breakdown coverage.


Unwarranted Warranty

Many choose to ignore getting additional insurance coverage as they feel that the initial warranty will be sufficient. However, what many do not realize is that they do not last forever. They also provide very limited coverage which usually applies only to manufacturing defects. Warranties will not provide coverage for cases such as damage caused by short circuits, carelessness or faulty setups. In case of a breakdown caused external factors like these, your best bet is to get a machinery breakdown insurance policy.

Hefty Replacement Costs

Heavy machinery and equipment used in businesses are very expensive. When the unfortunate happens, having to replace the entire thing can be very demanding in terms of time and cost. With a machinery breakdown policy, you can relax knowing that the replacement cost is covered by the insurance company.

Profit Loss

Alright, so you just lost an expensive piece of equipment. Other than the cost of replacement itself, your entire business operation is immediately put on halt. In financial terms, this means that you do not only have to pay for the replacement unit but also suffer profit loss due to machinery breakdown. With replacements usually taking a while, profit loss is a serious issue that will significantly affect your finances. Many companies offer machinery breakdown insurance policies that will also cover your profit loss.

Collateral Damage

In certain cases, the breakdown of your machinery or equipment could cause damage to other components or even your property itself. Product warranties will never cover for any damage done on anything other than the product itself. With a machinery breakdown insurance policy, some companies offer extended protection to provide coverage for your property.



While no one can predict what could happen next, it is always a good measure to have a contingency plan. In terms of running your business, it could never hurt to purchase some extra coverage for your expensive equipment. For the best coverage, do refer to companies like Pacific & Orient Insurance Co. Berhad. Their extensive experience means that they know which policy works best for you and your business. For a small premium, you can rest assured that when things go south, P&O has your back.

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