When critical systems like boilers or HVAC units fail, entire buildings can become unlivable, and getting them back in service isn't cheap. For housing organizations, these breakdowns don’t just mean costly repairs; they can disrupt operations, displace residents, and jeopardize compliance. The bigger issue? Standard property insurance often excludes internal equipment failures.
But there’s good news: with the right coverage, your organization can stay protected and prepared.
What is equipment breakdown coverage?
Equipment breakdown insurance helps cover the cost of repairing or replacing essential building systems when they stop working due to internal mechanical, electrical, or pressure-related failures. Unlike property insurance, which typically covers damage from external sources like storms or fire, this specialized coverage protects against issues that arise within your equipment.
Commonly covered systems include:
- Boilers, HVAC systems, and chillers
- Backup generators and elevators
- Electrical panels and mechanical systems
- Refrigeration and communication systems
This coverage does not typically apply to wear and tear or neglect, but rather unexpected breakdowns that interrupt operations and threaten building habitability.
In addition to covering repair and replacement costs, equipment breakdown insurance may also include protection for lost business income and extra expenses incurred during the system restoration period. This important feature helps housing organizations recover financially from service disruptions caused by equipment failures—an often overlooked but critical aspect of maintaining operations and protecting residents.
Why it matters for housing organizations
Public and affordable housing organizations face unique infrastructure risks. Many buildings rely on centralized heating, cooling, and vertical transportation systems that can render entire buildings unsafe if they were to fail.
Consider these facts:
- Over 56% of U.S. households rely on warm-air furnaces
- Another 13% use steam or hot water systems
- Together, these account for nearly 70% of all heating systems and are high-risk for mechanical failure.
That’s why regular inspections of equipment such as boilers and heating systems are so important. In many jurisdictions, inspections are mandatory, and a failed inspection can lead to the temporary shutdown of a property until safety issues are addressed. When essential systems fail, it’s not just your budget on the line, it’s your residents’ health and safety.
How HAI Group’s coverage stands out
HAI Group’s equipment breakdown insurance isn’t a generic product. It’s designed for public and affordable housing providers, with options tailored to your infrastructure and risk profile.
What sets us apart:
- Coverage built for housing operations
- Expert claims support to help you recover quickly and minimize resident disruption
- Backed by decades of housing risk expertise and partnership with trusted carriers
- Includes options for business income coverage and extra expenses incurred during system restoration
Our team understands the pressures you face, from tight budgets to regulatory requirements, and our solutions are built to support your mission.
Want a quick reference guide?
Download our printable quick-reference guide to equipment breakdown insurance —what’s covered, why it matters, and how it protects your property.
Is your organization covered?
Our account services team is here to help you:
- Review your current coverage
- Identify potential gaps
- Get quotes tailored to your property’s needs
- Strengthen your risk management strategy
Don’t wait until your equipment fails to realize your coverage gaps. Reach out to your HAI Group representative today to assess your protection and keep your operations running smoothly.
This article is for general information only. HAI Group® makes no representation or warranty about the accuracy or applicability of this information for any particular use or circumstance. Your use of this information is at your own discretion and risk. HAI Group® and any author or contributor identified herein assume no responsibility for your use of this information. You should consult with your attorney or subject matter advisor before adopting any risk management strategy or policy.
HAI Group® is a marketing name used to refer to insurers, a producer, and related service providers affiliated through a common mission, management, and governance. Property-casualty insurance and related services are written or provided by Housing Authority Property Insurance, A Mutual Company; Housing Enterprise Insurance Company, Inc.; Housing Specialty Insurance Company, Inc.; Housing Investment Group, Inc.; and Housing Insurance Services (DBA Housing Insurance Agency Services in NY and MI).
