What type of losses does an Equipment Breakdown (EBI) policy typically cover?

An Equipment Breakdown (EBI) policy is specifically designed to address the coverage needs arising from mechanical or electrical breakdowns of equipment. It typically covers losses that are directly related to equipment failures, such as the costs associated with repairing or replacing damaged machinery, as well as any resulting business interruption or downtime caused by the breakdown. This policy is particularly important for businesses that rely heavily on machinery and equipment for their daily operations, ensuring they are protected against unforeseen equipment failures that could impact productivity and revenue.

The focus on directly related equipment failures distinguishes this coverage from broader categories like property damage or liability claims, which EBI does not cover directly. Instead, EBI provides targeted protection for the operational and financial impacts of equipment breakdown, making it a crucial component of a comprehensive risk management strategy for businesses.