Restaurant Insurance – Part 5 Mechanical Breakdown

This is the fifth part in our 10 part series on North Carolina restaurant insurance.  This section will deal with mechanical breakdown, what this means for you the restaurant owner and how and why you should consider this protection form when setting up your NC restaurant insurance program.

First of all, an explanation.  What is mechanical breakdown coverage and when would you need it.  Let’s use an example.  Assume it’s the middle of July and temperatures have been hovering in the mid 90’s for weeks.  One morning you come in to your restaurant and find it is 85 degrees inside.  You call your landlord and he calls a technician to look at the air conditioning systems located on the roof of your restaurant.  As it turns out, both units have failed and it will be a week before parts can be found and the units replaced.  And yeah, no one is going to eat at your establishment until this problem is solved. Who can eat in 85 degree heat?  What you have here is a classic case of a mechanical breakdown that is going to cost you money in terms of cash flow, lost sales, and possibly spoiled supplies.

Your standard restaurant insurance policy is not going to cover these losses.   The only way to get this type of loss covered is to purchase mechanical breakdown coverage.  This is added as an endorsement to your standard restaurant package or restaurant businessowners insurance policy.  This is the kind of extra coverage that is often overlooked by agents who don’t specialize in insuring restaurants.  If you are buying your insurance from an agent who isn’t a specialist in restaurants, then you might be taking risks you don’t even know about.

Now it is important to understand that in our example, the repair costs to the air conditioner will not be covered under the mechanical breakdown protection. (for a discussion on how you might get burned for the costs of maintaining your landlord’s air conditioners on the roof, please click here.) This endorsement is for the consequential losses that are caused by the failure of a piece of equipment.  Also, don’t restrict your thinking just to air conditioners.  This can also apply to coolers, freezers and other types of equipment, the loss of which would take your business down completely or partially for some time frame. 

At Clinard Insurance Group in Winston Salem, NC, we specialize in helping restaurants all across North Carolina and South Carolina with their restaurant insurance needs.  We understand that your business is unique and your insurance needs are complex and varied and for that you need a restaurant insurance specialist like us.  We also know that not all restaurants are created equally and that they have different needs.  That is why we have developed 5 uniquely different restaurant insurance programs to help you get just what you need and not have to buy coverages that don’t apply to your situation.  We have a fine dining restaurant insurance program, a casual dining restaurant insurance program, a fast food restaurant insurance program, a bar and grill and tavern insurance program and a special insurance program for caterers.  If you would like help with your restaurant insurance, please call us, toll free at 877-687-7557 or visit us on the web at