Malfunction Insurance Market Report 2026

The malfunction insurance market size has grown rapidly in recent years. It will grow from $51.8 billion in 2025 to $57.39 billion in 2026 at a compound annual growth rate (CAGR) of 10.8%. The growth in the historic period can be attributed to growing reliance on complex machinery and systems, expansion of industrial automation, increasing financial impact of equipment downtime, rising awareness of operational risk coverage, adoption of extended warranty products.

The malfunction insurance market size is expected to see rapid growth in the next few years. It will grow to $85.55 billion in 2030 at a compound annual growth rate (CAGR) of 10.5%. The growth in the forecast period can be attributed to increasing use of ai-driven risk assessment, rising demand for subscription-based insurance models, expansion of insurance coverage for smart equipment, growing integration with IoT monitoring systems, increased focus on proactive risk mitigation. Major trends in the forecast period include increasing adoption of usage-based insurance models, rising demand for customized equipment protection policies, growing integration of predictive risk analytics, expansion of digital claims management platforms, enhanced focus on business continuity coverage.

The increasing dependence on machinery is expected to propel the growth of the malfunction insurance market going forward. Dependence on machinery is on the rise due to increasing automation, technological advancements, and the growing need for efficiency and precision across industries. Malfunction insurance helps machinery by providing financial protection against unexpected breakdowns, covering repair or replacement costs, and ensuring minimal operational disruptions, allowing businesses to maintain efficiency and productivity. For instance, in September 2024, according to the International Federation of Robotics, a Germany-based professional non-profit organization, the number of robots operating in factories worldwide reached 4,281,585 units, marking a 10% increase from 2023. Therefore, the increasing dependence on machinery is driving the growth of the malfunction insurance market.

Major companies operating in the malfunction insurance market are concentrating on the development of specialized commercial coverage offerings, such as equipment malfunction protection, to strengthen risk coverage, ensure operational continuity, and improve claims efficiency for businesses. Equipment malfunction protection is an insurance solution that protects organizations from financial losses caused by the sudden and accidental breakdown or failure of mechanical and electrical equipment, offering features such as coverage for repair or replacement expenses, protection against business interruption losses, and minimized operational downtime. For instance, in November 2024, Vero Insurance Ltd., an Australia-based provider of commercial insurance, introduced Vero Specialty Lines, a specialty insurance product portfolio created to manage complex commercial risks through enhanced equipment malfunction coverage. This offering includes new-for-old replacement under specific conditions, financial assistance for post-loss equipment upgrades, and coverage for on-site machinery failures along with related business interruption protection, thereby strengthening risk resilience, improving claims efficiency, and supporting business continuity for insured organizations.

In December 2024, ALKEME Insurance, a US-based insurance agency, acquired Jacobson Professional Insurance LLC for an undisclosed amount. Through this acquisition, ALKEME aims to strengthen its position in the professional liability sector and enhance its ability to serve law firms and legal professionals across the United States. By integrating Jacobson's expertise in legal malpractice insurance and risk management services, ALKEME expands its offerings in a crucial niche market and enhances its ability to deliver tailored, comprehensive insurance solutions to legal professionals. Jacobson Professional Insurance LLC is a US-based company that specializes in providing legal malpractice insurance and risk management services to law firms.

Major companies operating in the malfunction insurance market are AXA SA, Zurich Insurance Group, Munich Re, Nationwide Mutual Insurance Company, The Chubb Corporation, Tokio Marine Group, Swiss Re, Liberty Mutual Insurance Company, Aviva PLC, QBE Insurance Group, CNA Financial, Allianz Partners, Factory Mutual Insurance Company, RSA Insurance Group, Hiscox Ltd, Acuity A Mutual Insurance Company, HDFC ERGO General Insurance Company Limited, Universal Sompo General Insurance Co Ltd, Grinnell Mutual, Generali Group, IFFCO-Tokio General Insurance Company Limited.

North America was the largest region in the malfunction insurance market in 2025. The regions covered in the malfunction insurance market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the malfunction insurance market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The malfunction insurance market includes revenues earned by entities by providing services such as equipment breakdown coverage, claims management, risk assessment, loss prevention consulting, and policy underwriting. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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