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If you own a contractor business, such a landscaping, construction, painting, plumbing, welding, or electrician business, it’s essential to have maximum insurance coverage to protect your business and financial assets. While you may have coverage for liabilities, litigations and other risks, some of your equipment might not be properly covered. Certain types of equipment that is easy to transport isn’t always covered under other commercial property insurance policies, therefore making equipment floater insurance coverage vital.

What does equipment floater insurance cover?

Equipment floater insurance coverage is an insurance policy that is separate from other types of commercial property insurance coverages or liability insurance. Equipment floater insurance offers protection for equipment that is easily transported from one location to the next, rather than equipment which remains on site. For small businesses with equipment that remains on site for the majority of the time, commercial property insurance is typically the go-to protection. However, this isn’t so for other types of mobile equipment. Therefore, equipment floater insurance becomes necessary in order to protect these additional “movable” equipment types.

Equipment floater insurance offers protection for mobile equipment in the case of a number of risk exposures including theft, fire, flood, equipment breakdown, vandalism, and other types of damage. Extreme weather conditions and natural disasters like hurricanes or tornadoes can cause irreparable damage to contractor equipment. Unforeseen events such as these require small businesses to carry equipment floater insurance coverage in order to protect their financial assets and have coverage for repairs or replacements of these very expensive pieces of equipment.

What type of equipment is typically covered?

Generally speaking, equipment that is used for certain businesses and is mobile is typically covered under equipment floater insurance. For instance, a general contractor will require a bulldozer, roller compactor, or backhoe for various construction jobs — all of which are mobile — and therefore need equipment floater insurance coverage for protection. As another example, consider a landscaping business, which uses excavators, gravel screeners, riding mowers, and loaders — all of which need to be transported from client to client.

What does equipment floater insurance cost?

The cost of coverage under equipment floater insurance depends on how old the equipment is. If the piece of equipment it is five years or newer, repairs and replacement of equipment will typically be covered. However, for equipment older than five years old, the cost of repairs or replacement will be determined based on the actual value of the equipment. For instance, while a bulldozer may have been pricey when it was first purchased, the value goes down every year due to depreciation; therefore, a 10-year old bulldozer will not have as much coverage as one that is only a couple of years old.

What are typical exclusions?

Equipment that is damaged from an event that may have been prevented or is considered foreseeable such as improper use of the equipment, wear and tear of older equipment, or mechanical breakdown, will not be covered by equipment floater insurance. Some equipment is excluded from the equipment floater insurance policy coverage, including automobiles (which should be covered by commercial auto insurance), along with watercraft, aircraft, and other vehicles that are not considered to be equipment.

Small business owners of contractor businesses with mobile equipment are advised to obtain equipment floater insurance coverage in order to protect their business from financial struggle in the case of a natural disaster or other cause of damage. Equipment is expensive and should be properly protected by an insurance policy designed specifically for that type of machinery.

Portions courtesy of and © Insurance Information Institute ( Copyright © 2001-2020 Aloha Insurance Services, Inc. Kona HI All rights reserved.
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