Central Insurance Blog

Construction doesn’t wait. Crews are on the clock, machines are in motion, and deadlines are tight. Yet when equipment fails, schedules fall apart.

Whether mechanical, electrical, or human-caused, equipment failure remains one of the top reasons for delays, posing a significant threat to both worker safety and profitability when downtime occurs. Broader industry data from the Project Management Institute (PMI) found that 72% of the 40,000 contractors interviewed reported experiencing project delays in general “always or often,” underscoring the common nature of disruptions in the industry.

Jim Johnson, loss control construction specialist at Central Insurance, has been closely monitoring how equipment breakdowns affect productivity, safety, and profitability on jobsites for decades. 

In this article, he shares his insights, outlining the common causes of equipment failure and exploring how partnering with a top insurance carrier like Central can help mitigate the risks associated with these delays.

The Cost of Equipment Failure

Modern construction equipment is powerful, but more complex than ever. Equipment is typically the second-largest expense for contractors, behind labor, accounting for 15–20% of total project costs. 

“The newer diesel-powered machines come with emissions systems that are sensitive and expensive to repair,” Johnson says. “When a single sensor goes out, it can put the equipment in limp mode or shut it down entirely.”

That downtime comes with a price. Equipment breakdowns can trigger a cascade of costs, including repairs, replacement parts, technician time, and lost production hours. For high-value machinery, such as bulldozers or excavators, those numbers escalate quickly.

To keep projects moving, many contractors rely on rental equipment or backup machinery when a critical piece of equipment malfunctions. Still, even a brief delay can affect contract deadlines and overall project budgets. 

The First Step After Equipment Failure: Respond Safely and Quickly

When a breakdown occurs, safety is the top priority. Operators should immediately stop work, secure the site, and perform a quick assessment.

Remember: Hydraulic leaks, electrical faults, or overheating engines can pose fire or injury risks if ignored.

“A good operator will always do a daily inspection before they start working,” Johnson notes. “They walk around the equipment, check fluids, grease points, hoses, and make sure everything looks right. That’s one of the best ways to catch issues early.”

Hydraulic hoses, for example, operate at pressures up to 3,000 PSI. A small crack can spray combustible fluid onto hot engine components, igniting a fire. Additionally, backup alarms and visibility checks are equally critical in preventing collisions or injuries during breakdown situations.

How Tenna Helps Contractors Stay Ahead of Equipment Failure

Preventing equipment failure begins with information, and that’s where programs like Tenna come in. 

Tenna’s equipment management platform connects directly to all of a contractor’s mixed equipment fleet, providing real-time insight into performance, maintenance needs, and asset location.

“Tenna streamlines preventive maintenance,” Johnson states. “It shows when oil changes are due, flags warning codes, and tracks what service has been done on each machine. If a check engine light pops up on a bulldozer, it shows up instantly in the Tenna dashboard.”

This level of visibility prevents small issues from becoming big problems. If a mechanic detects a fault code for low DEF pressure or an emission sensor failure, for instance, they can take immediate action to prevent the machine from shutting down or causing further damage.

Equally valuable is asset tracking. You can weld Tenna’s small, durable trackers onto equipment attachments, such as buckets or hammers. 

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“On a large jobsite, it’s easy to misplace attachments,” Johnson mentions. “Tenna helps account for every asset.”

For contractors juggling dozens of jobsites, that’s peace of mind that saves both time and money. 

One Platform, One Solution for Equipment Management

Before partnering with Tenna, many contractors used multiple software tools to manage their fleets, including one for GPS, another for maintenance, and a third for telematics. That created inefficiencies and data silos.

“Tenna brings it all together in one platform,” Johnson explains. “Contractors can monitor equipment health, location, and maintenance schedules all in one place. It’s user-friendly, and it’s built specifically for construction environments.”

Central’s partnership with Tenna gives policyholders exclusive benefits, including a 10% discount on Tenna services. Even better, Tenna’s team personally installs the hardware and trains users to become self-sufficient. Once trained, contractors can easily add new equipment on their own as their fleets grow.

“This partnership is designed for best-in-class contractors,” Johnson says. “They value efficiency, safety, and data-driven decision-making. Those are the companies that really benefit from Tenna’s technology.”

Equipment Failure Coverage That Keeps You Moving

When it comes to equipment protection, contractors should review their inland marine policy to ensure that all owned and rented equipment, including attachments and specialized tools, is properly listed.

This coverage typically extends to resulting damage rather than mechanical failure itself, similar to how auto insurance covers crash damage but not a blown tire. Still, the right insurance can make a significant difference when costly breakdowns or losses occur.

Regular inspections, adherence to manufacturer maintenance schedules, and preventive monitoring through Tenna are key components of a comprehensive risk management plan. “As long as contractors are servicing their equipment based on hours and recommendations, they’re in good shape,” Johnson offers.

Work With a Trusted Partner Like Central

What sets Central apart is more than our robust coverage options for contractors; it’s how we deliver on our promise. When equipment failure happens, you need more than an insurance policy. You need a partner who responds quickly, understands your work, and helps you get back on schedule.

Central’s customers consistently praise our fast, reliable claims service, with adjusters frequently on-site within 24 hours and claims processed efficiently so you can return to work with minimal disruption. Our team provides reassurance, clarity, and care throughout the process, ensuring you’re not left waiting for answers. 

“Nothing can make a carrier lose a customer faster than poor claims handling,” Johnson notes. “We take pride in how quickly and accurately we handle claims. Our goal is always to ease the stress for our policyholders during a loss.”

With Central’s “A” (Excellent) rating from AM Best, you can trust that your coverage is backed by the stability and integrity of a company that’s been protecting businesses for more than 150 years.

To learn more about our partnership with Tenna, contact your local independent Central agent.