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Contractors Equipment Insurance Policy Information

Contractors Equipment Insurance

Contractors Equipment Insurance. Contractors equipment insurance is a type of insurance coverage that protects the tools and equipment used by contractors in their work. This can include things like power tools, hand tools, construction equipment, and other specialized equipment used in various trades.

The insurance covers damages or losses to the equipment, as well as theft or damage caused by natural disasters or other unforeseen events. It can also provide coverage for rental equipment that is used in the course of a project.

This insurance is important for contractors as it helps protect their business from financial losses due to equipment damage or theft, allowing them to focus on their work and complete projects on time.

Contractors equipment insurance protects your contracting equipment from theft, damage or loss with rates as low as $17/mo. Get a fast quote and your certificate of insurance now.

Below are some answers to commonly asked contractors equipment insurance questions:


What Is 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.

How Much Does Contractors Equipment Insurance Cost?

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.

What Property Does Contractors Equipment Insurance Cover?

Forklift Equipment

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.

What Does Property Does Contractors Equipment Insurance Exclude?

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.

What Hazards Does Contractors Equipment Insurance Cover?

Contracting Tools

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.

What Hazards Does Contractors Equipment Insurance Exclude?

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.

What Are Contractors Equipment Insurance Considerations?

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.

What's The Difference Between Business Property & Contractors Equipment Insurance?

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 - The Bottom Line

From construction to lawn maintenance, contracting businesses rely on equipment to generate revenue and profits. Contractors equipment insurance policy provides commercial coverage for mobile construction machinery, equipment and tools used in contracting or moving operations.

Additional Resources For Commercial Property Insurance

Read up on small business commercial property insurance, including how business property insurance protects your company's building's and/or their contents from damage, destruction, theft and vandalism.


Commercial Real Estate Insurance

Commercial property insurance is a type of insurance that provides coverage for businesses against losses or damages to their business property. This can include buildings, equipment, inventory, and other assets owned by the business.

There are several types of commercial property insurance, including standard property insurance, business interruption insurance, and contents insurance.

  • Standard property insurance covers damages to the physical structure of the business, such as the building, walls, and roof.
  • Business interruption insurance covers lost income and expenses incurred during the repair or rebuilding process.
  • Contents insurance covers damages to personal property within the business, such as office equipment and furniture.

Commercial property insurance is important for businesses of all sizes, as it helps protect against financial losses due to unforeseen circumstances, such as natural disasters, theft, or vandalism. It can also provide liability coverage in case of accidents or injuries on the business property.

To determine the appropriate level of property insurance for a business, it is important to consider the value of the business's assets, the location of the business, and the potential risks it faces. Many businesses choose to work with an insurance agent or broker to help identify the best coverage options for their specific needs.

Overall, commercial property insurance is a crucial part of any business's risk management strategy, helping to protect against financial losses and ensuring the long-term viability of the business.

Minimum recommended small business insurance coverage: Building, Business Personal Property, Business Income and Extra Expense, Employee Dishonesty, Money and Securities, Accounts Receivable, Computers, Signs, Valuable Papers and Records, General Liability, Employee Benefits, Umbrella, Hired and Non-owned Auto & Workers Compensation.

Other commercial insurance policies to consider: Earthquake, Equipment Breakdown, Flood, Computer Fraud, Forgery, Contractors' Equipment, Fine Arts, Cyber Liability, Employment-related Practices, Automobile Liability and Physical Damage, and Stop Gap Liability.


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