Properly Insuring Tools
Did you know that coverage for any property, tools, and equipment away from your office or premises is not covered under a standard property insurance policy? That means if you have tools or equipment stolen from a job site or vehicle you could be left to replace it all on your own dime.
As tools and other jobsite equipment are the lifeblood of restoration contractors, we wanted to share how to properly insure these items were they to be stolen or destroyed.
What Is Equipment Floater Insurance?
An equipment floater policy is specifically designed to cover business equipment that isn’t always in just one place. The policy pays for loss or damage to your equipment for covered claims, wherever it is located. This is perfect for pieces of equipment that are typically at a job site or stored in a vehicle.
How Do Equipment Floater Policies Work?
An equipment floater policy is usually written one of two ways:
Equipment Schedule. Each piece of equipment is listed individually on the policy by year, make, model, and serial number with value provided on each piece. Writing the policy this way works well for companies that don’t have a lot of equipment, have very large pieces of equipment, or specialty tools that are difficult to replace.
Blanket Policy. On a blanket policy pieces of equipment aren’t listed individually on the policy. Rather, a total insured value amount is given to the underwriter as the insurable amount. The policy will then provide a total limit of insurance for the property wherever it is located. If your company has a lot of equipment, this is definitely the much easier way to insure your tools and equipment.
Watch Out For Sub-Limits
Sub-limits on an insurance policy will usually limit the amount of coverage the insurance company is willing to provide on a specific item. On equipment floater policies, it is very common to have a sub-limit on tools. The insurance company may only provide a limit of $2,500 or $5,000 for your tools in the event of a claim.
How Much Does A Policy Cost?
A basic equipment floater policy is relatively inexpensive. Exact premium amounts will depend upon how much equipment and what types of equipment your company has. Large pieces of equipment are usually very cheap while tools and other small pieces of equipment (read: easily stolen) carry a higher rate.
If you have any other questions or if you want to know if your current insurance policy provides this coverage, please contact our office at (801) 748-2882.
