Is Boiler and Machinery the Same as Equipment Breakdown?

Navigating insurance terminology, especially for property and equipment protection, can be confusing. Businesses need to understand specific coverage types to mitigate financial risks. This article clarifies the relationship between traditional Boiler and Machinery and contemporary Equipment Breakdown coverage.

Boiler and Machinery Coverage

Boiler and Machinery (B&M) insurance historically covered physical damage and financial losses from equipment breakdown. Originating in the early 19th century during the Industrial Revolution, B&M was an early specialized property coverage protecting power-generating machinery.

Traditionally, B&M policies covered perils like boiler explosions, sudden machinery breakdowns, and pressure vessel ruptures. Coverage included internal issues such as mechanical failures, power surges, motor burnouts, and overpressure events. This was distinct from standard commercial property insurance, which covered external perils like fire or vandalism.

Historically, B&M policies protected equipment like boilers, pressure vessels, steam turbines, generators, and large motors. Refrigeration systems, pumps, and elevators were also covered. These policies focused on large, stationary equipment essential to industrial operations. Regular inspections were a key component, helping businesses comply with safety regulations.

Equipment Breakdown Coverage

Equipment Breakdown (EB) insurance is a modern evolution of traditional Boiler and Machinery policies, offering broader protection. It covers businesses against financial losses from mechanical, electrical, or pressure system failures, including costs for repairs, equipment replacement, and lost income due to operational interruptions.

EB policies have expanded covered perils to include electrical arcing, power surges, and motor burnout. They also address mechanical breakdowns, short circuits, and damage to communication systems. This broader scope reflects businesses’ increasing reliance on diverse technologies.

Modern EB policies cover a wider variety of equipment than B&M, including office equipment, electronic systems, production machinery, and HVAC systems. Computers, networks, and refrigeration units are also commonly covered. This expanded coverage addresses businesses’ dependency on internal systems due to technological advancements.

Comparing the Two

While “Boiler and Machinery” and “Equipment Breakdown” have distinct historical roots, modern insurance views EB as the evolved form of B&M. Contemporary policies use “Equipment Breakdown” to describe coverage that has absorbed and expanded traditional B&M protections, reflecting a shift towards more inclusive, technologically relevant solutions.

The primary distinction is scope; Equipment Breakdown policies are generally broader. While both cover unexpected equipment failure from internal causes, EB extends protection to a wider array of modern, complex systems beyond traditional industrial machinery. For example, B&M focused on large power-generating equipment, while EB includes electronic systems and IT infrastructure.

Today, “Equipment Breakdown” is the standard term for coverage that addresses risks once under B&M, plus a substantial expansion of other perils and equipment types. This evolution acknowledges businesses’ increased dependency on diverse equipment, from manufacturing lines to complex IT networks. The core concept of protecting against internal equipment failure remains, but coverage has significantly expanded to address modern technology.