The effective running of equipment—from cooking to refrigeration, computers to heating—is essential to any restaurant business. And yet most Commercial Property Insurance will not cover your business for any damage or loss of income should the cause of the problem be the failure of equipment that is vital to the operation of your business. To fill the gap and avoid potential financial catastrophe, your restaurant should have Boiler and Machinery Coverage, also known as Equipment Breakdown Insurance as part of your overall restaurant insurance policy. (Some older Boiler and Machinery policies may only cover steam boilers, so be sure to check the policy carefully.)

There are three principal areas of financial hardship that will be covered by Boiler and Machinery/Equipment Breakdown Insurance:

The cost to repair your equipment—repairs to a state-of-the-art refrigeration unit can easily run into the tens of thousands and, without the correct insurance, could potentially put your restaurant out of business. Equipment that will usually be covered as standard includes computers, telephones, electrical goods, and boilers. However, you do need to make sure that your specific equipment is covered.

The cost to replace any property damaged as a result of the equipment failure. For a restaurant it is vital to have coverage for damaged food—fresh foods spoiled in a broken refrigerator; frozen goods ruined when the freezer cuts out. You may also need financial assistance to dispose of spoiled food.

Finally, your Boiler and Machinery/Equipment Breakdown Insurance may cover you for losses caused by business interruption should you have to temporarily close your doors. However, if you also have Business Interruption Insurance, be sure that your two policies do not cancel each other out.

As with all insurance it is important to study the policy carefully when taking out Boiler and Machinery/Equipment Breakdown Insurance. For example: make sure you understand what, if any, equipment is excluded. Do you already have another insurance policy that will cause a conflict and potentially deny you financial assistance? What kind of breakdown, if any, is not covered by the Boiler and Machinery/Equipment Breakdown insurance? Most likely the policy will not cover you for a breakdown that is caused by general wear and tear. Is there a maximum age limit at which your equipment will no longer be insured, no matter how well maintained?

There is no question that, if you own a restaurant, you will need Boiler and Machinery/Equipment Breakdown Insurance but to be sure you get the right policy, speak to a commercial insurance agent specializing in restaurant insurance—after all, all restaurants are businesses, but not all businesses are restaurants.

Contact Vozza Agency for restaurant insurance in New Jersey.