Why You Need Contractor’s Equipment Coverage
Whether you’re a large construction firm or mid-sized business, your tools and equipment are a necessity to performing your job and also represent a significant investment. If they are stolen from the job site or damaged by the weather, that loss hampers your ability to do your job, which affects both your reputation and bottom line.
When the unexpected happens, you need a replacement quickly. Contractor’s equipment coverage is designed to give you the financial means to purchase what you lost.
How Will Your Equipment Be Valued?
Similar to personal belongings on a homeowner’s policy, you have the option to insure your equipment under actual cash value or replacement cost value.
Actual Cash Value: Pays out what the item is worth minus depreciation; the inexpensive option that offers a lower premium.
Replacement Cost Value: Pays what is needed to purchase brand new gear. If you lease equipment, most carriers only offer replacement value coverage. This option comes with a slightly higher premium, but may be well worth it considering how quickly tools can depreciate in a work environment.
Blanket vs Scheduled Coverage
Your equipment may be covered under scheduled coverage, blanket coverage, or a combination of the two.
Scheduled coverage applies coverage only to items listed during a specific time period while blanket coverage will insure all items providing they meet the definition of “covered property”.
When purchasing insurance, you’ll typically give your agent a list of equipment, including the make, model or serial number so that the equipment is insured the proper amount. Should you acquire a new tool after you activate your policy, it’s extremely important to call up your insurance company and have it added to the policy. Failure to do so means you have no coverage for that equipment should an accident happen.
Additional Coverages to Consider:
- Pollution Cleanup: If a piece of heavy equipment breaks down and leaks fuel or other contaminants on a job site, the costs associated with cleaning up the spill can be covered under your policy either by inclusion or added endorsement.
- Income Loss: Pays for income lost due to halt operations as a result of a covered loss.
- Boom coverage: The boom is a large, heavy part of a crane that can tip over and cause damage to surrounding structures and equipment. Coverage can be added via endorsement if it’s not already included in the policy.
To explore contractor’s equipment coverage for your construction business, call John Quinn at 617-612-6533 or email him at jquinn@hkinsurance.com.
