skip to main content
Travelers Logo
  • About
  • For Brokers
  • Contact Us
  • Careers
  • Français
Français
Main Navigation
  • For Individuals
      • Insurance for Individuals
      • Car
      • Home
      • More
      • New Home Warranty
        • TRU Builder™
        • Buyers & Homeowners
        • Builders & Developers
        • More
      • Services
        • Payment Options
        • Why Credit History Matters
    • Learn more

      You're a Safe Driver. Why Not Get Rewarded for It?

      IntelliDrive® is an auto insurance program available for customers in Ontario. 

      Learn more
  • For Business
      • Commercial Insurance
      • Industries
        • Business and Professional Services
        • Construction & Contractors
        • Hospitality
        • Manufacturing
        • More
      • Management & Professional Liability
        • Crime
        • Cyber
        • Directors and Officers Liability
        • Employment Practices Liability
        • More
      • Surety
        • Contract
        • Commercial
        • Developer
        • Project Loss Insurance
      • New Home Warranty
        • TRU Builder™
        • Buyers & Homeowners
        • Builders & Developers
        • More
      • Services
        • Cross Border Solutions
        • Risk Control
    • Learn more

      5 Ways to Use Digital Marketing to Grow Your Small Business

      Learn how to use digital marketing to help grow your small business.

      Learn more
  • Claim Centre
      • Claim Centre
      • Report a Claim
      • Claim Process
      • Frequently Asked Questions
      • Claim Support Materials
      • Recommended Repair Facilities
      • Recommended Treatment Facilities
      • Understanding Your Tow Rights
      • Report Fraud
      • CAT Response
    • Learn more

      Claim Process

      Navigating the claim process is easier if you know what’s ahead. Learn about what’s next after you file a claim.

      Learn more
  • Prepare & Prevent
      • Car
      • Home
      • Business
      • New Home Warranty
      • Weather
      • Insurance 101
    • Prepare and Prevent

      Prepare & Prevent

      Tips and expertise to help you protect your business and prevent risks at home and on the road. 

      Learn more
  • About Us
      • Our Story
      • Leadership Team
      • Corporate Governance
      • Newsroom
      • Financial Strength
      • Broker Compensation
    • Learn more

      We’re Travelers Canada

      Our team of 1,400 employees work every day with one common goal — to support our brokers and customers across Canada when they need us most.

      Learn more
  • For Individuals
    • Insurance for Individuals
    • Car
    • Home
    • More
    • New Home Warranty
      • TRU Builder™
      • Buyers & Homeowners
      • Builders & Developers
      • More
    • Services
      • Payment Options
      • Why Credit History Matters
      • Find a Broker
  • For Business
    • Commercial Insurance
    • Industries
      • Business and Professional Services
      • Construction & Contractors
      • Hospitality
      • Manufacturing
      • More
    • Management & Professional Liability
      • Crime
      • Cyber
      • Directors and Officers Liability
      • Employment Practices Liability
      • More
    • Surety
      • Contract
      • Commercial
      • Developer
      • Project Loss Insurance
    • New Home Warranty
      • TRU Builder™
      • Buyers & Homeowners
      • Builders & Developers
      • More
    • Services
      • Cross Border Solutions
      • Risk Control
      • Find a Broker
  • Claim Centre
    • Claim Centre
    • Report a Claim
    • Claim Process
    • Frequently Asked Questions
    • Claim Support Materials
    • Recommended Repair Facilities
    • Recommended Treatment Facilities
    • Understanding Your Tow Rights
    • Report Fraud
    • CAT Response
      • Find a Broker
  • Prepare & Prevent
    • Car
    • Home
    • Business
    • New Home Warranty
    • Weather
    • Insurance 101
      • Find a Broker
  • About Us
    • Our Story
    • Leadership Team
    • Corporate Governance
    • Newsroom
    • Financial Strength
    • Broker Compensation
      • Find a Broker
    • Find a Broker
  • Home
  • Prepare & Prevent
  • Business
  • Why Equipment Replacement Costs Matter for Manufacturers

Why Equipment Replacement Costs Matter for Manufacturers

Woman working in a manufacturing plant Woman working in a manufacturing plant

Do you know the full cost of replacing key equipment in your production line? When manufacturing equipment goes down, it can derail production and lead to costly delays. Having your equipment insured to its full replacement value can help avoid business interruptions.

Equipment replacement costs continue to increase over time. In order to ensure a business can rebound from the loss of key equipment, manufacturers should regularly review their insurance-to-value coverage to make sure it reflects the actual replacement cost.

The replacement cost is almost always higher than the market value of manufacturing equipment due to factors such as the engineering, logistics and training required to get your team up and running again, according to Peter Levesque, a Property Valuation Technical Director at Travelers.

“Many times we’ll see schedules of equipment where the value stays the same over a number of years,” says Levesque. “This might not be the case. It’s important to adjust for inflation at regular intervals to ensure proper coverage.”

Contrary to what manufacturers might expect, as equipment ages, it can actually increase in value, especially if it has been customized or modified over time for specific business requirements. Any modifications should be considered in the replacement cost total valuation.

Without proper replacement cost coverage, a manufacturer may need to pay the difference between the insured value and the actual replacement cost of the equipment. So it’s a good idea to request an insurance-to-value consultation regularly to help ensure adequate compensation.

Some equipment can also have long lead times to repair or replace, which can interrupt productivity. Highly specialized machinery can take months, possibly years, to replace. Customization can make it almost impossible to replace certain equipment at any price.

Plan for Continuity

Having a contingency plan that includes steps to take when a critical piece of equipment breaks down can help promote business continuity.

Consider this contingency plan checklist:

  • List of key equipment.
  • Inventory of spare parts.
  • Identify specialized rental equipment needs.
  • Line up repair contractors.
  • Working with other companies to help provide backup.

Manufacturers will want to identify replacement equipment sources and acquire spare parts for equipment repairs well before any break occurs.

Related Content

  • 6 Ways IOT Creates Competitive Advantage and Risks
  • Premises Security and Liability
  • 5 Types of Cyber Criminal

See All Business Content


Travelers logo

© 2025 The Travelers Indemnity Company. All rights reserved. Travelers and the Travelers Umbrella logo are registered trademarks of The Travelers Indemnity Company in Canada, the U.S. and other countries. Travelers Insurance Company of Canada, The Dominion of Canada General Insurance Company and St. Paul Fire and Marine Insurance Company (Canada Branch) are the Canadian licensed insurers known as Travelers Canada.

  • Travelers on Twitter
  • Travelers on Facebook
  • Travelers on LinkedIn
  • Travelers on Instagram
Français

Products & Services

  • For Individuals
  • For Business
  • Claim Centre
  • Prepare & Prevent

Our Company

  • Why Travelers
  • Careers
  • Community Involvement

Connect

  • Contact Us
  • Payment Options
  • Why Credit History Matters
  • Find a Broker

Legal & Compliance

  • Terms & Conditions
  • Accessibility
  • Privacy & Security
  • Cookie Settings
  • Legal Notices
  • Consumer Complaints
  • Consumer Code