FAQ: What is Equipment Floater Insurance?
Thursday, 22 July 2021
Contractors and tradesmen face risks that are unique to their industry and need appropriate insurance coverage to back them. With valuable equipment that gets used across multiple jobsites, you might be surprised to learn that you will need additional coverage called Equipment Floater Insurance. This blog will explain Contractor’s Equipment Floater Insurance so that you can better understand how it will protect your business from financial loss.
How Can I Protect My Business Equipment?
Your business equipment enables you to complete your projects; it is a part of your very livelihood. Whether it’s heavy machinery, expensive hand tools, or generators, if your portable equipment was stolen or damaged, it could cost your company thousands of dollars to repair or replace them. You could also experience business down time and miss project deadlines, costing you in revenue and impacting your company reputation. You do all you can to protect your expensive equipment on the jobsite, but the proper insurance coverage is also necessary to minimize the impact of disruptions if they were lost, damaged, or stolen. So, what kind of coverage do you need?
What Is Contractor’s Equipment Floater Insurance?
While it’s true that Commercial Property Insurance covers equipment in a fixed location, it does not cover mobile equipment that is transferred to different locations. Equipment Floater Insurance covers your portable machinery and equipment from direct physical damage and loss.
Here are some examples of equipment that are excluded from a standard commercial property policy that equipment floater insurance may cover:
- Bulldozers, road graders, forklifts, loaders, excavators, backhoes and concrete mixers.
- Hand tools and spare parts.
- Generator, compressors, hoists, pneumatic tools and cables.
- Derricks and draglines.
For tools valued under $1000 (e.g. hand saw, power drill, etc.), ask a BIG commercial broker about Tool & Installation Floater Coverage, or learn more in this blog.
What Does Contractor’s Equipment Floater Insurance Cover?
Generally, Contractor's Equipment Floater Insurance covers any peril except for specific exclusions listed by the insurance provider - this is called an All-Risk policy. The coverage would kick in to cover expenses for a variety of exposures, including theft, fires, floods, vandalism and other types of damage to your mobile equipment. This coverage persists as the equipment is moved from job site to job site.
Example 1: Your construction business has started a road paving project and you’ve got your grader, backhoe, loader, asphalt spreader, and rollers all ready to go on the jobsite. Overnight, kids break into the jobsite and vandalize the machinery, which now require repairs to function properly. Without Equipment Floater Insurance, your business would have to foot the bill to repair or replace the machines, and possibly rent equipment to meet your project deadline. Equipment Floater Insurance would cover costs to repair or replace the equipment to minimize financial loss.
Example 2: Your own a landscaping business and have riding mowers to provide lawn services to your clients. While mowing around a rural client’s pond, one of your drivers unsuspectingly hits a hole in the yard and the mower falls into the pond. The water damage makes it irreparable and needs to be replaced. It’s crucial for you to have Equipment Floater Insurance so that your company doesn’t have to pay to replace the mower.
Does Contractor’s Equipment Floater Insurance Cover...?
When you speak with a BIG commercial broker, they might also suggest these optional coverages that provide further protection. Some of these options may already exist on your business policy, but it never hurts to learn more about keeping your contracting business well-protected.
- Rented, Leased or Borrowed Contractor’s Equipment. You might not own all your own equipment – it may make more sense to rent or lease equipment for a specific project. When leasing or renting equipment, you as the contractor become liable for any damage you cause during the lease. With this endorsement, contractors can rent, lease, or borrow equipment knowing that they are fully covered.
- Equipment Rental Expense Reimbursement. When your equipment is damaged, you might need to rent equipment to meet a project deadline. If this occurs due to a covered loss, this coverage will provide money for additional expenses related to the claim, such as rental or lease of similar equipment, necessary overtime wages, and transportation of rental equipment.
Do I Need Contractor’s Equipment Floater Insurance?
Any contractor or tradesman who uses portable equipment should have this coverage to protect against financial loss. Our commercial broker team at Billyard Insurance Group always focus on understanding your business and its risks in order to suggest the best coverage. If they recommend Equipment Floater Insurance, you can trust it is in your business’s best interest.
With a better understanding of Contractor’s Equipment Floater Insurance, we hope you and your business can both survive in a loss and thrive at the best of times. It can be incredibly helpful to your business financially when the unexpected happens to equipment not covered by your general commercial policy. If you have more questions about this coverage, our trusted commercial brokers here to answer your questions. Contact us today!