Contractor's Equipment Insurance
Contractor’s equipment insurance is an essential part of any construction firm’s insurance program.
Commercial property insurance covers a business’ personal property while it is at a location listed on the policy, but it does not cover property that moves among different locations. Business automobile insurance does insure property that moves around, but it does not cover “mobile equipment” such as, bulldozers, loaders, digging equipment, and power tools that the business uses off its own premises. Power tools may cost only a few hundred dollars, but large pieces like backhoes and excavators may be worth tens of thousands of dollars. To properly insure such property, the firm needs contractor’s equipment insurance.
Contractors’ equipment insurance covers equipment and tools at construction projects and jobsites. This coverage is sometimes called a “floater” because the coverage follows the equipment from one jobsite to the next and also while equipment is in transit. Coverage is provided to protect against perils such as theft, vandalism, fire, windstorm, and typically flood and earthquake as well. This type of coverage can be written as a standalone policy or in conjunction with other coverage.
The type of equipment covered by contractors’ equipment coverage is wide-ranging. Covered equipment typically includes:
- Bulldozers, road-graders, forklifts, loaders, backhoes and concrete mixers
- Compressors, generators, hoists, pneumatic tools, cables
- Cranes and earthmovers
- Derricks and draglines
- Large power shovels
- Mobile equipment
Insurance companies usually offer several coverage options, such as:
- Rental reimbursement coverage, which covers the cost of renting a temporary substitute when a covered cause of loss damages an insured item.
- Reimbursement of income the insured looses when it cannot complete a project because a covered cause of loss has damaged an insured item.
- Blanket coverage, which insures all covered equipment under one large amount of insurance instead of insuring each item under its own individual amount.
Contractor’s equipment insurance is not just for contractors; municipal governments and any other organization that use this type of equipment need it as well. Contact a Heritage Group associate for more information about this important insurance coverage.
