What type of coverage addresses protection for equipment breakdown?

The type of coverage that specifically addresses protection for equipment breakdown is equipment breakdown insurance, also known as boiler and machinery insurance. This type of insurance is designed to cover the repair or replacement costs associated with the mechanical failure of equipment, which can include machinery, boilers, and other critical operational tools.

The significance of this insurance lies in its ability to protect businesses from significant financial losses that can occur when essential equipment fails unexpectedly. Standard property insurance policies often do not cover mechanical breakdowns, making equipment breakdown insurance a vital component for businesses that rely heavily on machinery and mechanical systems.

In contrast, general liability insurance focuses on liability protection against claims related to bodily injury and property damage caused to third parties, rather than covering equipment failures. Property damage insurance typically applies to damage inflicted on a company’s own property or others' property due to insured perils, but it does not specifically address breakdowns. Workers' compensation insurance is designed to cover medical costs and lost wages for employees who are injured on the job, completely unrelated to equipment failures.