If you have ever had the misfortune of having your materials stolen from your job site, you know how expensive those losses can be. One way you can help to protect your business in the future is to purchase installation floater insurance coverage for your work materials.
In this post, you will learn exactly what installation floater insurance is, what it does and does not cover, and how it compares to some related types of insurance policies.
What is Installation Floater Insurance?
Installation floater insurance is a type of floater coverage you can purchase for inland marine insurance.
In case you are not aware, inland marine insurance is for protecting equipment and materials while they are being transported over land.
The purpose of installation floater insurance is to cover your materials. Coverage for your materials begins when your materials depart your own business site. Coverage ends once installation of those materials is complete.
Do You Need Installation Floater Insurance?
Many different types of contractors can benefit from installation floater insurance, including general contractors, electricians, HVAC contractors, and more.
If your materials are going to be sitting around at a worksite awaiting installation, then yes, you likely need installation floater insurance.
- Materials can be stolen from a worksite. In particular, thieves like to go after copper (copper wiring especially), aluminum and lead, but they may steal other materials as well.
- Your materials may be exposed to other hazards while at a construction site. That means that sometimes they might be damaged by fire or accidents.
The costs of damaged or stolen materials can add up to quite a lot, especially with a large-scale project. It is well worth it not to take any unnecessary chances.
Depending on what type of contractor you are, you might need to purchase installation floater insurance, a similar product called builder’s risk insurance, or a combination of the two. We will explain more about that later.
What Installation Floater Insurance Covers
This type of floater covers both your materials and associated costs of labor. It applies when your materials are:
- Awaiting installation at a worksite
- In other forms of temporary storage
- In transit to a job site
- Being installed
Remember, it does not apply to the materials when they are stored long-term in your own facilities.
What It Doesn’t Cover
Quite a few exclusions typically apply when you purchase installation floater insurance. It is important to be aware of what they are. Here are some of the most common things installation floater insurance does not cover:
- Damage or loss from flooding
- Damage or loss from earthquakes
- Theft by employees (as opposed to other criminals)
- Materials in transit across the sea
- Materials in transit by air
- Tools and equipment
- Other structures
- Scaffolding and similar temporary structures
If you want to cover some of these excluded items, you may be able to do so by purchasing other policies. For example, you can purchase tools and equipment insurance or commercial auto insurance.
Installation Floater vs. Equipment Floater Insurance
Installation floater insurance is easy to mix up with equipment floater insurance. Both have similar names, and fall under the category of inland marine insurance.
Nevertheless, these two types of floater insurance cover different things. Again, the purpose of installation floater insurance is to cover your materials. Tools and equipment are usually excluded.
But if equipment floater insurance is available from your carrier, you can purchase that to insure your tools.
As we mentioned earlier, you also might be able to use a tools and equipment policy to do this. It just depends on how your carrier has structured their policies.
Installation Floater vs. Builder’s Risk Insurance
Another type of insurance that is regularly confused with installation floater insurance is what is called “builder’s risk insurance” or “course of construction insurance.” How do these two types of coverage differ?
They are very similar, but there are some key differences between them:
- You can usually get more comprehensive coverage in general by purchasing builder’s risk insurance rather than installation floater insurance. You cannot cover a whole building with installation floater insurance, for example, but you can with builder’s risk insurance.
- Even though builder’s risk insurance tends to be more comprehensive overall, sometimes it excludes certain things. Examples include electrical components and HVAC. Often, these things are covered by installation floater insurance.
So, which type of insurance should you purchase? That really depends on your role and the specific risks for which you might be liable.
- General contractors: As a general contractor, you may be in charge of an entire project and everything that is going on there. If that is the case, you will need builder’s risk insurance in case there is a large-scale issue that ends up affecting the whole project and/or a range of materials and equipment. But you also may need to buy installation floater insurance to cover some of the gaps in your builder’s risk insurance policy (i.e. electrical wiring).
- Sub-contractors: As a sub-contractor, maybe you only deal with limited materials. If that is the case, you may not need to spend money on a builder’s risk insurance policy. Instead, you can just pay for installation floater insurance. The general contractor you are working under will be the one insuring the project as a whole.
Why can’t you just rely on the builder’s risk insurance policy your general contractor has if you are a sub-contractor? Again, it may not cover your specific materials. It also probably will not cover them in transit, even if it does cover them at the worksite.
Where to Get Installation Floater Insurance
Pricing can vary for installation floater insurance depending on the policy details, amounts, deductible and underwriting guidelines. For that reason, we recommend that you request quotes from multiple carriers so you can find the best coverage at the most affordable price. To receive personalized quotes now for installation floater insurance, click the links below.