How Equipment Breakdown Coverage Can Protect Bars & Restaurants From Unexpected Costs

Picture this: it’s Friday night and everything’s going smoothly in your restaurant or pub. But then something happens: at first the lights flicker, then they go out altogether. Your business suffered an electrical short. The kitchen is dark and the POS systems are down. You don’t even want to think about the inventory in the walk-in cooler. Now what? The necessary electrical repairs won’t be cheap, plus you’ll have to close or limit your service for the night, impacting your revenue and leaving customers with a subpar impression of your establishment. 

Even without finding yourself in this position in reality, you can see the dangers it could spell for your bar or restaurant. The costs can be high to begin with when equipment breaks down, and they can climb even higher quickly. 

Fortunately, equipment breakdown coverage can protect your business in case of these rare, but highly disruptive circumstances.

What is Equipment Breakdown Coverage?

If you run a business in the food and beverage industry, you may already be familiar with several important policies like liquor liability insurance and food spoilage insurance. These policies protect your business, and equipment breakdown coverage is no different. So, what is it? 

Generally speaking, equipment breakdown coverage is exactly what it sounds like: coverage against equipment that breaks down. This equipment could include many things, from walk-in coolers to stoves to HVAC units to computer systems, but generally speaking, it refers to the equipment your bar or restaurant relies on to run on a daily basis. 

Equipment breakdown coverage is important because if your equipment breaks down, your business might not be making money until it’s repaired. In fact, the costs associated with repairs and replacements entail far more than just the repairs or replacements. 

Read, ‘5 Equipment Maintenance Tips for Commercial Kitchens.’

What’s Covered by Equipment Breakdown Coverage?

What is covered can vary depending on individual policies and whether equipment needs to be repaired or replaced, and if there were additional losses as a result of the main breakdown. In most instances, equipment breakdown coverage protects the equipment essential to your business’ operations. For example, it might cover: 

  • The cost to repair or replace your equipment. Think stoves, walk-ins, fryers and the like. 
  • The cost of spoiled foods or inventory. If your walk-in breaks down, your inventory could be at risk too. 
  • The cost to repair or replace computer or POS systems and restore data.

Equipment breakdown coverage usually covers these costs and the necessary labor for repairs or installation until your business’ operations are able to return to normal. 

Because every situation is unique, it’s important that you speak with your local Society agent regarding specific scenarios and coverage options.

Is Equipment Breakdown Coverage Worth It?

The answer to that question is almost always a resounding yes. Consider the alternative: you could find yourself being forced to repair or replace equipment out of pocket, and the replacement of a single piece of equipment can easily cost several thousand dollars. 

However, equipment breakdown coverage isn’t foolproof. If the damages are found to have been caused deliberately or through negligence, you may be left to pay the cost on your own, so it’s important to follow best practices and maintain your equipment

Related reading: Six Factors That Can Drive Up Restaurant Insurance Costs

What’s the Difference Between Equipment Breakdown Coverage & Commercial Property Insurance?

Equipment breakdown coverage is part of a comprehensive commercial property insurance package. While your general property coverage protects against external factors like storms and fires, your equipment breakdown coverage protects from internal factors. This might be a mechanical malfunction in the equipment or an electrical short. If your repair takes a few days or a few weeks, your business may not be operational. Without equipment breakdown coverage as part of your commercial property insurance, you may not have business income protection for the revenue you lost during this shutdown.  Your local Society agent can further explain the differences and discuss the coverages that are best for your operation.

Protect your Business from the Unknown 

As a business owner, you understand the importance of protecting your bar or restaurant from the unpredictable. Slips and falls happen; the weather can turn nasty, and equipment can break down. While you undoubtedly do everything you can to protect your business, sometimes things happen. And when they do, it’s best to be prepared. 

At Society Insurance, we understand the unique challenges facing your bar or restaurant – and that they can impact you and your employee’s livelihoods. We use our extensive industry knowledge to prepare and protect bars and restaurants from the unpredictable and keep your business running strong. 

To learn more about equipment breakdown coverage and discuss your business’ needs, contact your local agent today.


As a mutual insurance company, we operate and exist for the benefit of our policyholders. For more than 100 years, Society has been helping businesses overcome the unexpected with comprehensive coverage packages and outstanding claims handling, underwriting and risk management.

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