Buy Contractors Equipment Insurance

Contractors Equipment Insurance is a type of insurance policy that provides coverage for the tools, equipment, and machinery that a contractor uses in their business operations.

This type of insurance can protect against damage, theft, or loss of equipment, as well as liability for any damage or injury caused by the equipment during use. It can also provide coverage for the cost of renting or leasing replacement equipment in the event of a loss.

This type of insurance is typically purchased by self-employed contractors, small business owners, and larger construction companies.

The average price of a standard contractors equipment policy for small contracting businesses ranges from $17 to $69 per month based on location, type of equipment, tools or other business property covered, claims history and more.

This coverage form insures various types of equipment that contractors use. Covered equipment includes:

• backhoes
• concrete mixers
• cranes
• derricks
• draglines
• drills
• earthmovers
• excavators
• forklifts
• front-end loaders
• graders
• pile drivers
• tractors

And similar and related equipment but is not limited to just these.

The primary eligibility requirement is that the contracting equipment be mobile in nature.

In the past, there were no standard or filed coverage forms, rules, or rates for this class of business and any coverage form could be used. While this is still the case, the Insurance Services Office (ISO) and the American Association of Insurance Services (AAIS) have developed standard coverage forms for this class of business.

Contractors equipment insurance coverage usually applies on a special causes of loss/perils basis. However, coverage can be provided on a specified causes of loss or named perils basis.

Vehicles designed primarily for use on public roads are not eligible for coverage under contractors equipment insurance coverage forms or policies.

However, certain equipment mounted on rubber tires that can move on a public road under its own power is eligible.

Some examples of other types of excluded property are:

• Property loaned, leased, or rented to others
• Property while waterborne, except while in transit by carriers for hire
• Property while airborne

It is important to review the specific company's form to determine exactly what contracting equipment is covered and what is not.

The contractors equipment insurance coverage form is usually written on a special causes of loss/perils basis or, infrequently, on a specified causes of loss/named perils basis.

It depends on the coverage form the insurance company uses and the risk's underwriting desirability.

When used, the specified causes of loss/named perils basis includes the following:

• Collapse of bridge or culvert
• Collision, upset, or overturn of a conveyance
• Earthquake
• Explosion
• Fire and lightning
• Flood
• Theft
• Vandalism and malicious mischief
• Windstorm and hail

Coverage forms that insure underground mining equipment may include other named perils or causes of loss. Examples include slate fall, roof fall, cave-in, landslide, compression, strikes, riot, and civil commotion.

Coverage forms that insure oil and gas well drilling rigs and operations may include blowout or cratering.

An example of coverage follows here:

1. American Excavation uses a flatbed trailer to move its backhoe from the main location to a jobsite.
2. The driver turns a corner too fast, both the truck and the trailer flip, and the backhoe falls off. Both the backhoe and a vehicle parked nearby are destroyed.
3. The contractors equipment insurance coverage form covers only the loss of the backhoe.
4. The business auto coverage form covers the damage to the truck and trailer, as well as the damage to the parked vehicle.

The exclusions include the standard inland marine or property exclusions such as civil authority, nuclear hazard, war, contamination, deterioration, criminal, fraudulent or dishonest acts, and loss of use.

Additional ones that are specific to the hazards that would be expected for a contractors equipment risk are theft by persons entrusted with the property, deterioration, dishonest or criminal acts by the insured or employees, and mechanical failure.

A common exclusion for derricks and cranes is for damage that occurs because the equipment is used to lift items in excess of the load capacity of the equipment. Another one excludes all losses that occur while the equipment is being operated.

Contractors equipment coverage is not a controlled inland marine class of business. Underwriting standards also vary by company as far as which coverages are available for specific risks.

Exclusions in the coverage forms being considered should be examined carefully to clearly understand the coverage provided and the causes of loss/perils excluded. A lower premium may be due to a significant reduction in coverage.

CONTRACTORS EQUIPMENT VALUATION

Equipment may be valued based on the limit for it on the declarations, on an actual cash value basis, or on a replacement cost basis.

Coverage forms that schedule specific equipment identify and describe the property and provide a limit of insurance for each listed item of equipment. There is usually an aggregate catastrophe limit that applies to all covered property in a single occurrence.

It protects the insurance company in case a single loss destroys all scheduled equipment. There may also be provisions for a separate limit of insurance that applies to newly acquired property.

Optional coverage may be available for small items of covered property with a blanket limit and coverage for employee tools and clothing.

WHERE DOES CONTRACTORS EQUIPMENT INSURANCE OFFER COVERAGE?

Contractors' equipment is covered anywhere in the United States of America, its territories and possessions, Puerto Rico, and Canada.

COINSURANCE

Contractors' equipment coverage written on a scheduled basis may or may not be subject to coinsurance. Coverage written on a blanket basis is usually subject to 90% or 100% coinsurance.

NEWLY ACQUIRED CONTRACTORS EQUIPMENT PROPERTY

Most contractors equipment coverage forms provide this coverage or offer it as an option. It usually automatically covers additionally acquired equipment for up to 30 days after it is acquired provided the insured reports the acquisition to the insurance company.

This property usually consists of purchased, leased, rented, or borrowed equipment similar to the kind the coverage form insures. After being reported, the equipment is endorsed to the policy and additional premium is charged at pro rata of the annual rate for the remaining coverage period.

Policy declarations usually have spaces to enter a limit of insurance for newly acquired property.

CONTRACTORS EQUIPMENT INSURANCE COVERAGE EXTENSIONS

Contractors' equipment coverage may extend to cover scheduled property and newly acquired property loaned, leased or rented to others.

Another coverage extension offered by some companies is coverage for crane and derrick booms when operating.

The following example illustrates the key difference between commercial property and contractors equipment insurance:

American Excavating keeps 10 pieces of equipment in the yard and garage at its main location. However, the equipment regularly moves from the main location to various jobsite locations.

This equipment can be insured as business personal property while at the main location, on a transit coverage form while being moved from one location to another, and on an off-premises coverage form when at a jobsite.

On the other hand, it is much simpler to write coverage for this equipment on a contractors' equipment coverage form to cover it wherever it is within the coverage territory.

Contractors Equipment Insurance provides coverage for contractors who use machinery and equipment in their business operations. Here are some examples of claims that may be covered under this insurance:

• Theft or vandalism of equipment: If your equipment is stolen or damaged due to vandalism, the Contractors Equipment Insurance can help pay for the replacement or repair costs.
• Accidental damage: If your equipment is accidentally damaged while in use, the insurance can help pay for the repair or replacement costs.
• Equipment breakdown: If your equipment breaks down due to mechanical failure or electrical problems, the insurance can help pay for the repair or replacement costs.
• Transportation accidents: If your equipment is damaged or lost during transportation, the insurance can help pay for the replacement or repair costs.
• Weather-related damage: If your equipment is damaged due to a natural disaster such as a storm or flood, the Contractors Equipment Insurance can help pay for the replacement or repair costs.

Overall, Contractors Equipment Insurance can help protect contractors from the financial burden of equipment damage or liability claims related to their machinery and equipment.