Equipment breakdown insurance refers to the coverage of loss of the equipment occurs due to mechanical or electrical breakdown. Insurance coverage includes the repair and replacement of the material and also consists of the property damage due to equipment breakdown.
The global equipment breakdown insurance market has the potential to grow with historical CAGR in the forecast period from 2020-2027. The factors driving the demand for equipment breakdown insurance, such as the loss occurred due spoilt inventory, the cost to repair and replacement of damaged equipment, loss of income, and others are rising need for the requirement of insurance for equipment breakdown.
Equipment breakdown insurance is commercial property insurance. It covers the loss of business property and loss of income caused by machine or equipment failure such as computers, telephone systems, air conditioners, refrigerators, boilers, lathes, or production equipment. This equipment may suffer mechanical or electrical faults that could damage other property.
Additionally, equipment breakdown insurance designed to cover three types of hazards that excluded under typical property policies that include first electrically generated, magnetic, or electromagnetic energy that can damage or destroy electrical or electronic equipment. However, most real estate policy does cover a fire caused by the loss. Second is a mechanical failure. It includes rupture or burst caused by centrifugal force. Coverage usually provided for damages caused by elevator collisions. The third one consists of a boiler explosion of steam boilers, steam pipes, steam engines, or steam turbines. Also excluded are damages caused by events inside the equipment (such as steam explosions) such as steam boilers and steam pipes. However, property insurance policies usually cover losses due to gas or fuel explosions.
Furthermore, equipment breakdown insurance is necessarily required for the businesses if the success is depending upon the proper functioning of the machines and equipment. The equipment breakdown insurance is a smart step to cover various losses that occurred with the breakdown. The insurance covers the cost of the business losses while the power was out. It also includes the cost associated with time and labor for repairing and replacing the damaged equipment.
Most of the companies have relied exclusively on the equipment to run the entire business. Thus, the success of the business depends on the proper function of kit and machinery. Therefore, improving work efficiency and enhance the safety of the equipment insurance is a requirement to recover the losses in case of equipment breakdown.
The breakdown of machinery or equipment for the business wholly dependent will occur loss for repairing or replacing it. The equipment breakdown insurance will help in reducing the burden of extra expense to the company and also covers the damage that occurs with the downtime of the equipment. Therefore, the equipment breakdown insurance is bolstering its market share in the forecast period.
Based on the type, the global equipment breakdown insurance market segmented into Mechanical, Electrical, Computers and communications, Air conditioners and refrigeration system, Boilers and pressure equipment, Others. The mechanical type insurance segment accounted for the largest share in the global equipment breakdown insurance market. It is mainly owing to the maintenance and repair cost required for repairing cars is very expensive. Thus, the car insurance segment is majorly taken by the customer to increase the warranty of the vehicle. It helps in reduction in repair, maintenance, damage of the car, also car insurance is generally taken for covering the cost of car theft or accident.
Moreover, boilers and pressure equipment will dominate the market demand for the equipment breakdown insurance market. It is mainly owing to the requirement for any of the business rely on equipment such as boilers and machinery, computers, security systems, air conditioners. Thus, maintenance and working are the sole purposes for the adoption of insurance for a breakdown of equipment.
Based on the application, the global equipment breakdown insurance market bifurcated into Repair, Replacement. The replacement segment has the largest market share in the global equipment breakdown insurance market. It mainly owes to the additional protection provided for the home appliances, furnaces, and other devices that have high chances of mechanical or electrical breakdown. In addition to equipment breakdown insurance helps in covering extra charges for the replacement of the equipment. Moreover, the repair segment will account for the largest share in the global equipment breakdown insurance market. It is mainly owing to the rising disposable income of the consumer that has bolstered the demand for air conditioners, and also increasing market share of cars have fueled the demand for the need of equipment breakdown insurance.
Based on geography, the global equipment breakdown insurance market segmented into North America, Europe, Asia Pacific, South America, and Middle East & Africa. The Asia Pacific expected to hold the largest share of the global equipment breakdown insurance market. Increased disposable income, emerging sales of four-wheeled vehicles, rising demand for air conditioners in summer, and usage of HVAC systems are expanding the market demand for the equipment breakdown insurance. Moreover, Europe also dominates the market share in the forecast period. Owing to the adoption of various automated machinery and rising electric and motor instruments and tools used in factories and furnaces are bolstering the market share of equipment breakdown insurance in Europe.
Companies such as Zurich, AXA, AIG, Allstate, Safeco Insurance, Liberty Mutual, Travelers Insurance, Aviva, Erie Insurance, Allied Insurance, Gulfstream Insurance, and others are key players in the global equipment breakdown insurance market.