Equipment Floater Coverage
Equipment floater coverage, sometimes referred to as inland marine coverage, is a type of property insurance designed to cover loss or damage to your mobile equipment and tools. It is different from standard property insurance, which requires items be at one, specific location. An equipment floater can be written as a standalone policy or endorsed onto an existing property policy.
FAQs
Coverage
Equipment floater insurance is intended to cover common jobsite risks like fire, water damage, theft, vandalism and natural disasters. It covers equipment while at a jobsite, during transit and at temporary storage locations.
Types of equipment
Called a “floater” because coverage follows the equipment from one place to another (and even during transit), equipment floater insurance is intended to insure portable items of all kinds. The most common items covered by an equipment floater are pieces of construction equipment used by contractors, like backhoes and forklifts. It can also cover smaller items like power and hand tools and provide protection for unique items like jobsite trailers. Equipment floater coverage can also be used by creative based businesses to cover their audio and visual equipment, musical instruments or props.
Scheduled & unscheduled equipment
Items covered by an equipment floater can be on a scheduled or unscheduled basis. Scheduled items will be listed individually on the policy and each item will have its own limit of insurance. Unscheduled items will not be individually named but broken out into categories like employee tools.
Leased & rented equipment
Many insurance carriers offer the option to add leased and rented equipment coverage to an equipment floater policy. This can be equipment that you lease or rent from others or equipment that you lease or rent to others. It is especially important coverage if your business leases or rents equipment as part of your regular business operations and limits should be selected based on value of equipment you typically lease or rent. Most equipment rental or leasing companies require proof of insurance prior to completing the rental agreement.
Valuation basis
It is common for equipment that is newer than five years to be valued on a replacement cost basis. Replacement cost means the cost to replace the damaged item with one of like kind or quality. Items that are older than 5 years are usually valued on an actual cash value basis, meaning cost new less depreciation.
Exclusions
An equipment floater is not designed to cover items that are more appropriately covered by other types of insurance such as vehicles, watercraft and aircraft. Specialty equipment such as cranes, logging equipment or mining equipment may also be excluded. While coverage varies between policies and insurers, most equipment floater policies exclude mechanical breakdown, wear and tear, damage during repair and improper use of equipment. Keep in mind that equipment floaters are not written to cover building materials; you’ll need an installation floater for that exposure.