Restoration Insurance: Installation Floater

Many contractors and service people may be missing coverage on their insurance policies. Did you know that materials in transit, at a customer location and at a temporary location are not covered for loss unless you have an “Installation Floater” on your policy?

An installation floater is an insurance policy that covers personal property installed, fabricated or erected by a contractor. It covers the property until the installation work is accepted by the purchaser or when the insured’s interest in the property installed ceases.

As an example, let’s take a restoration contractor, Bill Sample. Bill is remodeling a kitchen for Mrs. Fussy. Mrs. Fussy wants new cabinets and countertops for her kitchen. She orders the top of the line items from Bill and he’s ready to get to work. He goes to his supplier and loads the new counter tops in to his truck. On route to Mrs. Fussy’s home, his truck hits some major potholes. When he arrives and begins unloading the counter tops, he discovers that one of the larger counters is completely cracked down the center. There is no way that Mrs. Fussy will accept a counter top in this condition and replacing it will be $10,000.

Next, Bill begins working on Mrs. Fussy’s cabinets. He gets them to her house with no problems. They are beautiful, but heavy and hard to maneuver. As he’s installing the last of the overhead cabinets, it slips out of his hands and is badly damaged when it lands on the kitchen floor. No amount of wood glue and duct tape is going to make this cabinet look like the others and a new cabinet will cost $1,500!

This is a big job for Bill. His profit for the whole project was supposed to be $7,500. If Bill doesn’t have an installation floater on his insurance policy, he’ll spend $11,500 to replace the damaged counter top and cabinet. But, Bill’s fortunate, by purchasing an installation floater, he eliminated these types of situations and now Bill only needs to pay his deductibles. Not to mention, he will be able to keep nearly all of his profit. He’ll also be able to keep Mrs. Fussy as a customer, because all of the work Bill performed is up to her high standards.

Note: Example provided above is for informational purposes only and is not a guarantee of coverage. Every insurance policy is different, and the specifics of coverage should be discussed with a qualified insurance professional.