Equipment Breakdown Insurance Market Share & Trends [2033]

Equipment Breakdown Insurance Market Overview

The Equipment Breakdown Insurance Market size was valued at USD 2.81 million in 2024 and is expected to reach USD 4.33 million by 2033, growing at a CAGR of 4.93% from 2025 to 2033.

The Equipment Breakdown Insurance market is gaining significant traction globally as industries seek coverage for unexpected mechanical, electrical, and pressure system failures. As of 2024, over 72% of large-scale manufacturing enterprises globally have incorporated specialized breakdown insurance into their risk mitigation strategies. The insurance offers financial protection against losses stemming from internal equipment failures, including compressors, boilers, HVAC systems, transformers, and production lines. In the United States alone, nearly 58,000 policies specific to equipment breakdown were underwritten in 2023, a 17% increase from the previous year. Additionally, 35% of new industrial facilities in Asia-Pacific include breakdown coverage in their initial insurance purchase plans. The demand from sectors such as healthcare, energy, and commercial real estate has surged, with 68% of hospitals in the EU now carrying such policies to prevent downtime due to MRI and CT scan equipment failure. Moreover, the rise in smart manufacturing and Industry 4.0 adoption, which relies on interconnected machinery, has elevated the exposure to potential losses, thus fueling the need for coverage. As cyber threats also increase, many breakdown insurance policies now include coverage for cyber-induced mechanical failure, a feature added in over 22% of new policies issued globally.

Key Findings

Top Driver Reason: Increasing integration of advanced, sensitive equipment across manufacturing and healthcare sectors.

Top Country/Region: United States accounts for the highest number of policy issuances with over 58,000 in 2023 alone.

Top Segment: Manufacturing sector, comprising 38% of total equipment breakdown insurance policyholders worldwide.

Equipment Breakdown Insurance Market Trends

In recent years, the Equipment Breakdown Insurance market has experienced considerable evolution in terms of policy offerings, coverage scope, and client demographics. The rise of high-value and complex machinery, particularly in pharmaceuticals and electronics manufacturing, has caused insurers to tailor their offerings more precisely. For example, in 2023, over 40% of new policies included endorsements for electronic data processing equipment, which represents a major shift from traditional mechanical coverage. Additionally, insurers processed more than 13,000 claims globally in 2023 related to equipment breakdown, with an average claim cost of $68,000, reflecting the growing severity and cost implications of such failures. Smart grids, IoT-powered plants, and autonomous production lines have increased equipment vulnerability. Digital sensors, for instance, accounted for 19% of failure-related claims in 2023. Another trend reshaping the market is the bundling of equipment breakdown coverage with broader property and business interruption policies. In North America, 46% of insurers now offer hybrid packages that include coverage for both breakdown and downtime recovery. Furthermore, risk analytics and predictive maintenance are being integrated into the underwriting process. About 31% of insurance providers in Europe utilize predictive analytics to calculate policy pricing based on equipment age, usage, and environmental conditions. Climate resilience is another growing factor. With temperature extremes and electrical grid failures increasing, 13% of equipment failures in 2023 were linked to climate-related events such as power surges and overloads.

Equipment Breakdown Insurance Market Dynamics

DRIVER

Increasing reliance on complex and sensitive equipment in industrial processes

Across the global industrial landscape, companies are deploying highly advanced, digitally integrated equipment systems. This includes precision robotics, cleanroom systems, nuclear medicine tools, and AI-driven production lines. With 38% of smart factories in Europe reporting equipment failures in the last two years, the necessity for comprehensive breakdown insurance is growing rapidly. In the healthcare sector alone, over 21,000 MRI and radiology machines are operational in U.S. hospitals, requiring stringent uptime standards. Failure of such equipment can cost as much as $100,000 per hour in lost productivity and service denial. The adoption of energy-efficient but complex HVAC systems in commercial spaces also poses mechanical risks, with HVAC failures rising by 18% in 2023. As operational downtime becomes costlier, insurance products offering real-time diagnostics and fast claims processing are increasingly preferred, encouraging insurers to embed tech platforms into their services.

RESTRAINT

High cost of premiums and limited awareness among SMEs

Despite the critical value of coverage, small and medium enterprises (SMEs) often overlook equipment breakdown insurance due to the perceived high premium costs. On average, annual premiums for comprehensive coverage range from $1,500 to $12,000, depending on equipment complexity and operational risk. For SMEs with limited capital, this cost is considered prohibitive. Furthermore, 41% of SMEs in Southeast Asia are unaware that such policies exist or misunderstand the scope of coverage. This lack of awareness restricts market penetration. Insurers often find it unprofitable to design highly customized plans for small-scale units, thus reducing policy accessibility. Additionally, in many emerging markets, regulations mandating breakdown insurance are either lacking or poorly enforced, further limiting adoption.

OPPORTUNITY

Integration with digital twins and predictive analytics

A promising opportunity in the Equipment Breakdown Insurance market is the use of digital twins and predictive analytics in policy modeling. Digital twins—virtual replicas of physical equipment—allow insurers and clients to simulate breakdown scenarios and assess failure risk in real-time. About 22% of European insurers have started integrating such models into premium calculations and claim verification processes. Predictive analytics enables dynamic risk evaluation based on live data. For instance, AI-based thermal scanning in energy plants identifies temperature anomalies before mechanical failures occur, triggering pre-emptive claims or maintenance alerts. This innovation helps reduce claim frequency by up to 27% and gives insurers better profitability margins. Companies offering IoT-enabled condition monitoring with insurance bundles are gaining traction, especially in North America and Japan.

CHALLENGE

Complex claim verification processes and delays

One of the persistent challenges in the market is the complexity of claims verification. Because equipment failures can stem from wear-and-tear, lack of maintenance, or improper operation, disputes arise in more than 30% of claims, causing delays in settlements. This undermines customer trust and affects policy renewal rates. On average, claim resolution time for equipment breakdown in 2023 was 28 business days, with some high-value industrial claims exceeding 60 days due to expert investigations and component testing. Additionally, 17% of claims filed in Asia-Pacific were partially denied due to misinterpretation of exclusions. These inefficiencies increase administrative costs for insurers and highlight the need for smarter claims automation tools using machine learning and blockchain-based verification systems.

Equipment Breakdown Insurance Market Segmentation

The Equipment Breakdown Insurance market is segmented by type and application, reflecting the specific risks, industry needs, and equipment categories most vulnerable to mechanical and electrical failures. This allows insurers to design targeted policies that address operational risk in diverse sectors. Globally, over 62% of policies issued in 2023 fell under the manufacturing and healthcare sectors, while application-wise, machinery breakdown coverage remains the dominant choice, accounting for 44% of total active policies.

By Type

Manufacturing: The manufacturing sector is the largest contributor to the equipment breakdown insurance market, accounting for 38% of global policy uptake. Facilities in this segment house complex production lines, conveyor systems, robotics, CNC machines, and heavy-duty presses. In 2023, over 130,000 claim reports were filed by manufacturers globally due to equipment malfunction. Countries like Germany, the USA, and China had the highest frequency of claim occurrences. Manufacturers rely on insurance for not only repair costs but also for downtime losses that can exceed $80,000 per day.
Construction: Construction companies often operate with mobile and fixed equipment such as cranes, concrete mixers, and pile drivers. Around 18% of all breakdown insurance claims in 2023 came from the construction sector. The short-term nature of projects and harsh environmental conditions expose machinery to elevated risks. Insurers now offer project-specific policies. For example, in the UAE alone, 12,700 temporary equipment policies were underwritten during the 2023 infrastructure boom.
Healthcare: Hospitals and diagnostic labs require insurance coverage for highly sensitive and costly equipment like X-ray systems, CT scanners, and dialysis machines. In the U.S., 95% of hospitals with over 150 beds carried equipment breakdown insurance in 2023. This segment represents 16% of the global market. A single MRI machine failure can disrupt diagnostic services for over 240 patients daily, underscoring the need for insurance continuity.
Energy: Power plants, both fossil and renewable-based, have high-value electrical and pressure systems. The failure of a gas turbine or switchgear could cause massive grid disruptions. In 2023, 22% of all global power outages were linked to preventable equipment failures. Insurance policies in this segment increasingly include real-time monitoring provisions. Over 10,000 energy clients in the U.S. and EU were insured against breakdowns by Q4 2023.
Commercial Enterprises: This includes malls, data centers, office complexes, and hotels using HVAC systems, lifts, kitchen equipment, and power backup generators. In 2023, 9.3 million commercial properties worldwide had some form of equipment coverage. High-rise buildings in urban areas, particularly in Asia, showed a 12% increase in policy purchases due to frequent HVAC-related failures during peak summer months.

By Application

Machinery Breakdown Coverage: This is the largest application segment, covering physical damages to moving or stationary machinery. In 2023, 44% of all equipment insurance claims globally were filed under this application. Heavy industries in the U.S. and India have increasingly favored this application due to high replacement costs, with claims averaging $75,000 per incident.
Electrical & Mechanical Equipment Insurance: This type covers transformers, generators, switchgear systems, and other critical electric devices. It saw a 19% increase in adoption in 2023 across data centers and telecom hubs. North American insurers report that electrical surge-related claims made up 21% of their total volume.
Property Damage Coverage: This segment includes coverage for structural damage caused by equipment failure, like a boiler explosion or HVAC malfunction leading to fire. Commercial property claims in 2023 saw a 15% rise, especially in older buildings. Policy demand increased in Japan, where 7.5% of policies are now customized for earthquake-triggered breakdown incidents.

Equipment Breakdown Insurance Market Regional Outlook

The Equipment Breakdown Insurance market exhibits diverse regional dynamics based on industrial maturity, regulatory mandates, and awareness levels.

North America

North America remains the largest market, driven by high industrialization and regulatory compliance. In 2023, the U.S. alone issued 58,000+ policies specific to equipment breakdown. The average claim value stood at $68,000, with the healthcare and manufacturing sectors dominating policy subscriptions. Canada, on the other hand, experienced a 12% rise in demand from energy firms following a series of turbine failures. Smart factory adoption in the U.S. Midwest has led to a 24% increase in insurance-linked sensor deployments.

Europe

Europe is marked by rapid integration of predictive analytics into underwriting. Germany, France, and the UK lead with more than 110,000 commercial properties covered. The EU’s Green Deal initiatives have encouraged renewable energy companies to seek protection for wind turbine gearboxes, with 3,200 new energy policies underwritten in 2023. In Scandinavia, harsh winters led to 1,400 HVAC-related claims, indicating growing demand in residential and commercial spaces.

Asia-Pacific

Asia-Pacific has seen the highest year-over-year growth in policy issuances. China, India, and Japan are the frontrunners. In 2023, 34% of new factories in East Asia included breakdown insurance in their initial risk plans. Indian data centers purchased over 6,000 policies for electrical failure protection, while Japan saw 8% of hospitals upgrade their policies to include cyber-physical equipment damage. With rising temperatures and blackout incidents, Southeast Asia has emerged as a critical growth zone.

Middle East & Africa

The market here is growing due to large-scale infrastructure and energy projects. In 2023, the UAE, Saudi Arabia, and South Africa accounted for 11,000+ policy issuances. Breakdown insurance is now bundled with large project contracts. Over 1,700 claims were filed in GCC countries linked to HVAC and cooling system failures during extreme summer heat. In Africa, mining and telecom sectors drove demand, with a 14% rise in premium collections in 2023.

List of Top Equipment Breakdown Insurance Market Companies

Hartford Steam Boiler (USA)
FM Global (USA)
Zurich Insurance Group (Switzerland)
Chubb Limited (USA)
Allianz SE (Germany)
AXA XL (France)
Liberty Mutual Insurance (USA)
Munich Re (Germany)
AIG (USA)
Travelers Companies, Inc. (USA)

Top Two Companies with Highest Market Share

FM Global (USA) leads the market with the highest number of commercial industrial clients. As of 2023, it had underwritten policies for over 1,200 global manufacturing firms, covering equipment valued above $30 billion. The firm processed 4,600+ claims in 2023, averaging a settlement time of 19 days.
Hartford Steam Boiler (USA) holds the second-largest share, particularly dominant in healthcare and energy segments. With 900,000 policyholders worldwide, it added over 14,000 new clients in 2023 alone. HSB has pioneered sensor-driven underwriting, with over 80,000 IoT devices deployed in insured equipment globally.

Investment Analysis and Opportunities

In 2023, the equipment breakdown insurance market attracted major investments from both private equity and insurance technology (InsurTech) ventures. Over $620 million was invested globally into equipment insurance platforms offering real-time diagnostics, AI-based claim assessment, and customized industrial policies. One of the fastest-growing investment opportunities is in sensor-integrated insurance plans. Companies like FM Global and AXA XL have invested heavily in developing platforms that continuously monitor equipment health. As of Q4 2023, more than 95,000 clients globally are using predictive maintenance devices connected to their insurance platforms. The use of blockchain for claim validation has also received funding. Munich Re announced a $28 million fund to develop blockchain-based claim processing tools in 2023. The aim is to cut claim resolution time by 30%, improving client satisfaction and reducing fraud. Emerging markets such as India, Vietnam, Nigeria, and Brazil represent high-growth opportunities due to rising industrialization. With equipment failure-related losses in India reaching ₹5,400 crore in 2023, insurers are aggressively pushing product lines tailored to SMEs and mid-scale factories. Furthermore, with renewable energy equipment such as solar inverters and wind turbines becoming common, insurers are investing in climate-resilient coverage models. Allianz and Zurich Insurance launched pilot programs in 2024 targeting 18,000 small solar projects in Asia-Pacific. Corporate alliances between manufacturers and insurers are another key trend. GE and Chubb partnered to offer embedded coverage for all GE medical devices sold in 2023, reaching over 4,000 installations with automatic insurance embedded at the point of sale.

New Product Development

Insurers in the Equipment Breakdown Insurance market have prioritized innovation to keep up with the rapidly evolving machinery and technology landscape. In 2023 and 2024, product development focused on integrating smart monitoring, real-time diagnostics, and cyber-physical equipment protection into traditional coverage models. One of the most notable innovations is the development of dynamic premium policies, where insurance rates adjust monthly based on the real-time performance of the insured equipment. FM Global launched its Dynamic Equipment Policy Suite in early 2024, offering premium discounts of up to 25% for clients who install approved IoT monitoring systems. Within six months, over 1,800 companies subscribed to this flexible model. Another advancement is the inclusion of cyber-triggered breakdown coverage, designed for machinery controlled by digital or cloud-based systems. Hartford Steam Boiler introduced an upgrade in late 2023 that protects against damages caused by system intrusions, malware, or firmware corruption. By Q2 2024, over 12,000 clients across North America had adopted this coverage, with particular interest from the finance, manufacturing, and healthcare sectors. Additionally, Zurich Insurance Group launched an AI-assisted policy adjustment tool in April 2024. This system evaluates maintenance records, sensor alerts, and operational logs to automatically suggest policy enhancements. This feature reduced claim rejections due to non-disclosure by 18%, improving client satisfaction and policy renewals. In the energy sector, Chubb Limited rolled out specialized breakdown products for wind turbines, solar farms, and hydrogen processing units. The GreenTech Coverage Pack launched in 2023 now covers over 2,500 clean energy projects globally. It includes failure coverage for blade motors, inverters, and lithium battery storage systems. Healthcare-focused innovation also saw growth. Liberty Mutual and Munich Re co-developed a MedicalTech Shield policy in 2024, specifically designed for CT scanners, dialysis machines, and surgical robots. This product features 48-hour fast-track claims, with pre-approved repair service providers, reducing hospital equipment downtime by over 30%. These new products reflect a growing insurer shift toward preventive and predictive coverage. As a result, insurers reported that 28% fewer emergency breakdown claims were filed in Q1 2024 compared to the previous year. The trend of developing modular and tech-enabled policies is expected to expand further, driven by automation, AI, and ESG priorities in equipment-heavy industries.

Five Recent Developments

FM Global (Q1 2024): Launched a Predictive Risk Analytics Suite for industrial equipment, which is now used by 1,300 clients globally, reducing machinery claim frequency by 21% within the first six months.
Zurich Insurance Group (Q3 2023): Rolled out Smart Machinery Watch, a real-time failure alert app now integrated with over 17,000 pieces of insured equipment, particularly in Germany, France, and Singapore.
Chubb Limited (Q4 2023): Introduced Cyber-Physical Fusion Coverage for digital factory equipment, covering 4,200 clients by early 2024 across the U.S., Japan, and South Korea.
Allianz SE (Q2 2024): Deployed a blockchain-based claims platform across nine countries, reducing average settlement time for breakdown claims by 35% and increasing process transparency.
AXA XL (Q1 2023): Launched a Digital Twin Integration Program for heavy machinery, with 620 industrial clients in Asia and Europe utilizing the model for predictive breakdown simulation and coverage adjustments.

Report Coverage of Equipment Breakdown Insurance Market

This report provides in-depth, factual, and figure-driven analysis of the global Equipment Breakdown Insurance market, covering all critical aspects of market performance, segmentation, regional presence, company dynamics, and product innovation. It explores how insurance providers are responding to increased mechanical and electrical failures by developing smarter and more adaptive coverage models for various sectors such as manufacturing, healthcare, construction, energy, and commercial enterprises. The report outlines the structural foundation of the market, supported by figures such as the 58,000+ policies issued in the U.S., the 38% contribution by manufacturing, and 130,000 claims filed by manufacturers in 2023. It illustrates how demand is surging for bundled policies, dynamic pricing, and real-time equipment risk assessments. With segmentation analysis based on both type and application, this report details the unique risks and insurance needs of specific sectors. For instance, electrical and mechanical equipment policies witnessed a 19% rise in demand, while property damage coverage accounted for a significant share of claims due to HVAC and boiler malfunctions. The regional outlook spans North America, Europe, Asia-Pacific, and the Middle East & Africa, spotlighting emerging hot zones like Southeast Asia, where equipment policy adoption in data centers grew by 6,000+ units in India alone in 2023. Each region’s performance is dissected through a lens of industrial activity, policy behavior, and insurer initiatives. Profiles of leading companies such as FM Global and Hartford Steam Boiler highlight their strategies in claim optimization, smart policy innovation, and client acquisition. FM Global’s deployment of sensor-linked underwriting for 1,200 industrial firms, and HSB’s implementation of over 80,000 IoT monitors, reinforce their dominance. Further, the report covers investment insights, showcasing how over $620 million was poured into smart policy tech and blockchain-based claim solutions in 2023. Product development activities—such as cyber-physical fusion coverage, digital twin integration, and medical equipment-focused shields—demonstrate how insurers are evolving rapidly.