What Is Equipment Floater Insurance And When Do You Need It?

Equipment floater insurance is a type of property insurance that covers damage to or loss of equipment moved from one venue to another. Floater insurance differs from typical property insurance, which covers personal and real property that should typically be in one location.

You can buy coverage as an individual policy or as an addition to normal property policy. If you own a business, for instance, construction, plumbing, or landscaping, it’s vital to have maximum coverage to protect your financial assets and business.

Although you might have coverage for litigations, liabilities, and other risks, you might lack proper coverage for some equipment. Here’s what you should know about the insurance.

What Floater Insurance Is

The insurance provides protection for contractor equipment that’s easily transportable from one site to another instead of equipment that’s onsite. For businesses whose equipment remains onsite for most of the time, commercial property coverage is ideal. This isn’t the case for other kinds of mobile equipment.

As such, equipment floater insurance becomes vital to protect the extra “movable” types of equipment. Generally, mobile equipment used for some contractor businesses falls under this policy. For example, a general contractor will need a roller, bulldozer, or compactor for different contractor jobs. A landscaping business, which uses riding mowers, excavators, and loaders needs coverage because the equipment needs transportation from one client to another.

What the Policy Covers

The policy provides protection for mobile equipment in case of various risk exposures, including fire, theft, vandalism, and equipment breakdown. Natural disasters and adverse weather conditions such as tornadoes or hurricanes can yield irreparable damage to equipment.

Such unexpected events require small businesses to have insurance to protect their assets and have coverage for replacements or repairs of the expensive equipment. The coverage cost will vary depending on the age of the equipment.

If the equipment is five years or newer, replacement and repairs will apply. However, for older equipment, the cost of replacement or repairs will differ depending on the equipment’s actual value. For instance, if you bought a bulldozer at a high cost initially, the value depreciates annually. Therefore, a 10-year old bulldozer won’t have considerable coverage compared to the one that’s only a few years old.

How It Protects Contractors

Costly Machinery

The policy protects companies’ costly machinery. Although hand tools are normally easier to damage accidentally during work, employees also tarnish costly machinery frequently. If you’re an owner of a construction business and one of your workers breaks a recently purchased tool, you’ll have to purchase a new one or repair it.

With coverage, you won’t need to worry about the high repair cost or the higher price of purchasing a new tool. Your insurer will handle it and you and your employees can complete the construction in a timely fashion.

Rented Equipment

Floater insurance also covers rented equipment. Numerous contractors agree to take on projects for which they lack proper equipment. To accomplish the project, they must obtain rental equipment from other companies.

Keep in mind that rented equipment is just as vulnerable to damage as owning your equipment. To help contractors avoid hefty charges for repairs on rentals, floater coverage provides insurance for rented tools.

Vandalism Protection

Since vandalism is a common yet unfortunate form of destruction, floater policies incorporate it in their coverage. If you move valuable equipment regularly, it’s important to note that they’re vulnerable to different kinds of vandalism such as graffiti when left in particular areas. If you’re concerned about possible vandalism towards your equipment, you’re better off investing in floater insurance.

Natural Disasters

Floater insurance offers coverage for natural disasters. Business proprietors must prepare for unforeseen weather conditions. Depending on the equipment your company uses, some weather conditions could be harmful.  For instance, companies that operate in regions where tornadoes are comparatively common, have a likelihood of having their machinery ruined.

To avoid spending on new equipment because of damages that weren’t necessarily your mistake, obtain floater insurance as soon as possible. Moreover, you should implement a preparedness plan to keep workers safe during natural disasters.

Final Thoughts

Business owners require floater insurance to keep their regularly moved assets safe and maintain high profits. Whether you own a construction, landscaping, or plumbing business, you require floater insurance. It will provide a better economic situation in the event of a disaster or accident.

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