It would be logical to think that property, specifically Business Personal Property, would be covered under a property policy. However, if said business personal property “floats” from one job site to the next, in all likelihood that equipment is not covered at job sites. In most property policies, business personal property- including equipment, is only covered when at the property(ies) specified in the policy. In order to ensure the “floating” equipment is covered, a business owner’s best bet is to purchase a Floater policy, a type of inland marine coverage.
Contractors of any sort can utilize floater policies. From photographers to crane dealers, to movie studios to circuses and everything in between. As long as a business has equipment that routinely travels to various locations for business purposes, it will qualify, and can do with, a floater policy. Floater policies offer the advantage of covering leased or rented equipment, not only owned. One obvious perk to this is avoiding the need of purchasing the often over-priced insurance offered by equipment lessors and being in control of the coverage limits and deductible when purchasing the policy.
Ultimately, the purpose of a floater policy is to cover equipment in the event of a covered loss. The typical covered loss is theft, fire, breakage and sometimes, water damage. It is important to note that a floater policy will not cover equipment that needs to be replaced due to wear and tear. Provided a covered loss occurs, how a floater policy covers damaged equipment depends on the age of the equipment. If the equipment is five years old or less, the policy will cover the cost to repair or replace the equipment for replacement value. If the equipment is greater than five years old, it will be repaired or replaced, at actual value.
In short, for business owners whose entire business depends on the reliability of their equipment and frequently works at job-sites other than their main place of business, a floater policy is a must-have. Contact Beckerman & Co with any questions about how floater policies work, or to review the insurance program of your particular business.