Most contractors know that it is essential to obtain various forms of insurance coverage to protect themselves from liability and litigation. However, some contractors are surprised when they learn that certain types of equipment that are transported from job site to job site are not always covered under standard commercial property insurance policies.
What Is Contractors Equipment Insurance?
Contractors equipment insurance provides protection for equipment and tools that are easily transported from one location to the next. While standard commercial liability coverage is good for insuring equipment that remains at one, fixed location, it cannot safeguard mobile equipment or items that travel with a contractor. Such items often include the following types of equipment:
- Bulldozers, graders, loaders, backhoes.
- Hand tools and spare parts.
- Generators, compressors, hoists and pneumatic tools.
- Derricks and draglines.
What Does Contractors Equipment Insurance Cover?
Most contractors equipment insurance policies are written on an "all-risk" basis, meaning that all perils except those specifically excluded by the terms of the policy are covered. Typically, contractors equipment insurance protects firms from a variety of exposures, including thefts, fires, floods, equipment breakdowns, vandalism and other types of damage. This coverage persists as the equipment is moved from job site to job site.
Scheduled Or Blanket Coverage
Contractors equipment insurance typically provides scheduled coverage, blanket coverage or a combination of the two. Before purchasing a policy, it's important to understand the following regarding these coverage options:
This coverage applies exclusively to items listed in an agreed-upon schedule. A detailed list of covered items is typically attached to the original policy or kept on file with the insurer.
This type of coverage applies to any items that fall under an agreed-upon definition of "covered property." With blanket coverage, property is protected regardless of whether or not it is listed in a schedule. To ensure coverage, organizations often use a combination of scheduled and blanket coverage. When purchasing a policy, be sure to provide your broker with a list of tools and equipment you want protected. In this list, include the item's make, model, serial number and estimated value.