Contractor Insurance

Coverage for contractors equipment is usually written on an Inland Marine form to cover the equipment while in transit and at the various jobsites. Construction equipment coverage can provide protection against losses for tractors, bulldozers, earthmoving machinery, and other various types of heavy equipment. This coverage can cover hand tools, small pieces of equipment, used to do various jobs by the contractor. This coverage provides protection against physical damage to the equipment by: fire, theft, windstorm, upset and overturn and etc. Coverage can be written on a named peril basis or on an all-risk basis. The named perils policy clearly states which coverage perils which are afforded and if they are not mentioned in the policy the peril is not covered. All-Risk form clearly states what is not covered under the policy and if it is not stated as excluded it is a covered peril.

Coverage can either be provided on a scheduled or unscheduled basis. Usually equipment with a value of greater than a $1,000 is scheduled and values under a $1,000 dollars may not be scheduled. The scheduling limit depends on the company writing the coverage their limit maybe larger or smaller. The values for the unscheduled equipment still figure into the values for the overall schedule.

Losses are usually paid on an actual cash value basis.  Actual Cash Value means: The amount that a replacement tool or piece of equipment with similar wear and tear, can be found for in the marketplace. When the insured sets values for his or her equipment they should consider what similar equipment would sell for in the market.

The rating for contractor’s equipment is the rate times the equipment’s (or the schedules value) value per hundred dollars of value for the piece of equipment or the schedule.

Deductibles for contractor’s equipment can vary greatly from insured, insurance company, coverage afforded for the work performed, and the type of equipment being used and its value. Deductibles can be written on an occurrence basis where the deductible amount is taken away from the amount of the loss and with any other calculations for depreciation the rest is paid to cover the loss. Or there are situations where the deductible is taken against each piece of equipment for the whole schedule of equipment or up to some predetermined amount.

The people who need equipment coverage are:

  1. Contractors
  2. Builders
  3. Landscapers
  4. Loggers
  5. Plumbers
  6. Electricians
  7. Masons
  8. Roofers
  9. Carpenters
  10. Steel Erectors
  11. Snow and trash removal operations
  12. Excavators
  13. Mining and agricultural operations
  14. State governments, Cities, Manupalities
  15. Civil authorities

When writing contractor’s equipment be familiar with your insured’s operations and know your coverage exclusions so you can negotiate the best deal for your client. You want to discuss various exclusions for contractor’s equipment such as the boom exclusion, overload exclusion, and the water born exclusion. By knowing your insured you can tailor coverages with greater proficiency.

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