Why would a manufacturer need equipment breakdown insurance?

A manufacturer would need equipment breakdown insurance primarily because it specifically addresses losses that are often excluded from standard commercial property insurance policies. Equipment breakdown insurance provides protection for machinery and equipment failures, which can happen due to a variety of reasons like mechanical breakdown, boiler explosions, or electrical failures.

In manufacturing, downtime can lead to significant financial losses, and standard commercial property insurance typically does not cover these specific types of operational risks. By obtaining equipment breakdown insurance, a manufacturer ensures that they are protected against sudden and accidental physical damage to their equipment, allowing them to maintain operations and reduce the risk of significant financial impact from unexpected equipment failures.

This type of insurance is tailored to cover the costs associated with repairs or replacements of damaged equipment, as opposed to other types of insurance that may not provide the same level of coverage or might exclude these specific types of losses.