Unlock Peace of Mind: Standalone Coverage for Equipment Breakdown

In today’s equipment-intensive buildings, ensuring comprehensive protection against the costs of unforeseen breakdowns is paramount. The increasing integration of technology into our daily lives, exemplified by the rise of electric vehicle charging stations within buildings, has heightened the exposure to potential risks and underscores the need for a comprehensive solution.

To address these challenges effectively, a standalone equipment breakdown policy can be purchased to work hand-in-hand with a property insurance product such as strata, build to rent or Industrial Special Risk (ISR).  The policy provides a broad definition of ‘equipment’ which incorporates today’s technologies, as well as high limits of liability (up to the building sum insured).

To help you understand its benefits, Vero has provided the following summary:

Equipment Breakdown – More than just repairs

Equipment Breakdown insurance can protect you against the costs of unforeseen breakdowns, as well as income protection for today’s equipment-intensive residential buildings. It covers you for:

Physical Damage: the cost to repair or replace damaged equipment, including associated labour costs.
Expediting Expenses: incurred to expedite temporary or permanent repairs or replacement plus temporary hire costs to keep owners and tenants happy.
Loss of Rental Income & Temporary Accommodation for Lot Owners: in the event that a lot becomes uninhabitable due to an Equipment Failure.
Service interruption: extends business interruption cover due to loss of electricity and other services caused by a breakdown of the equipment owned by a 3rd party.
Contribution towards Green Upgrades. If a piece of equipment is upgraded following a breakdown, an additional contribution is provided towards the cost if such upgrade is for the benefit of the environment, safety, or energy efficiency.

Vero has claims and engineering specialists who work only on equipment breakdown losses can expedite repairs so you can return to business with minimal disruption to tenants or loss of income.

For Many Types of Equipment:

Electrical Distribution Systems

Power interruption can shut down a complex and cause major disruption for tenants. Electrical panels, circuit breakers and cables are all interconnected; a short circuit in one part of the system can affect the whole building.
This cause can be as simple as loose connections, dust, vermin, or network power fluctuations. A failure in your electrical distribution system can cost significant amounts and take weeks to repair.

Air Conditioning

Air conditioning systems have many parts that can break down and result in costly repairs. A chiller unit can be worth hundreds of thousands, and refrigerant costs can be many thousands even in smaller systems.

Electronic Building Management Systems

Today’s “smart” residential buildings contain sophisticated electronic equipment that operate boilers, air conditioning, lights, elevators, fire detection, security systems, and modern phone networks etc. These electronics are vulnerable to severe damage from power surges. Circuitry is expensive to repair and replace, especially when incompatibility issues arise when a single component needs replacing.

Loss Examples:

Car park exhaust fan breakdown – Residential Strata

The local repair technician was called to this residential strata to determine why its car park exhaust fan was not working.
They found that the circuit breaker for the fan kept tripping and diagnosed that the fan motor windings had failed unexpectedly, resulting in the motor short circuiting. As a result of the failure of the motor, the fan blades and assembly were seized onto the motor shaft and the Variable Speed Drive (VSD) failed.
The fan was located in a sealed chamber at the bottom of a vertical shaft with one entry point at the top and a ladder down the shaft. The repair required specialist rigging equipment to conduct the repair in a safe manner, which included the cutting, removal and re-installation of sheet metal ducting. This added to the overall costs of the repair and was included in the claim amount.
Final Loss: $51,900

Failure of a copper pipe causes loss of refrigerant – Commercial Strata (Office Building)

At the beginning of summer, the building’s maintenance team was alerted by an alarm signalling a refrigerant gas leak. When they visited the premises, they found the plant room completely full of refrigerant gas and unsafe to enter.
The copper pressure equalisation line on Compressor No. 2 had suffered a catastrophic failure. As a result, the system had lost its complete charge of R22 refrigerant gas.
The failed pipe was replaced and the system was recharged with refrigerant, before being returned to service. The cause of the fault remains a mystery.
Final loss: Settlement amount $164,000

Catastrophic power surge to office block

An electrical arc developed in the vertical busbar which travelled eight floors of a 30-storey building. The damage made it necessary to replace the electrical wiring on all 30 floors.
Due to the structure’s age, building codes required the new wiring to meet the current standard. This meant a change from aluminium to copper with the wiring to be `fully enclosed’ which required bigger holes in floor slabs on each floor.
It took some time to complete the work. The tenants of the building had to find alternative accommodation, resulting in a significant loss of rental income.
Final loss: Settlement amount $16,500,000 (including business interruption)

Whether your apartment building is insured with a strata, build to rent or ISR insurance policy, contact a member of our team today to ensure peace of mind with a comprehensive equipment breakdown policy.


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This Summary gives general information. Refer to the policy to identify the full terms, conditions and limitations on cover. The policy wording can be accessed on Vero’s website vero.com.au. The cover offered to you may vary from the described. Insurance issued by AAI Limited ABN 48 005 297 807 trading as Vero Insurance.

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