Contractors Equipment Floater
An inland marine policy insuring mobile equipment such as excavators, cranes, and tools against physical damage on a worldwide or regional basis.
What It Is
A Contractors Equipment Floater is an inland marine policy that covers mobile equipment owned, leased, or rented by a contractor against physical loss or damage. Covered items typically include excavators, bulldozers, loaders, cranes, generators, compressors, scaffolding, small tools, and trailers.
Coverage is usually written on an open perils (special form) basis with limits scheduled per item for high-value equipment and a blanket limit for small tools and miscellaneous gear. Most floaters cover equipment in transit, at job sites, and in storage, often on a worldwide or US-and-Canada basis.
Valuation is typically Actual Cash Value or Replacement Cost. Common endorsements include rental reimbursement, leased and rented equipment coverage, employee tools, and contractor's pollution for equipment-related releases.
Why It Matters for Brokers
Contractor equipment is mobile, valuable, and exposed to theft and accidental damage daily. A standard commercial property policy generally excludes property in the open or away from the insured premises, leaving a major gap unless an inland marine floater is in place. Brokers who fail to schedule new equipment promptly or set blanket small tool limits low expose clients to uninsured losses. A stolen $250,000 excavator that is not on the schedule may be denied entirely, and a $40,000 small tool theft on a $10,000 blanket limit pays only $10,000.
Real-World Example
A site contractor with a $3.8 million equipment fleet carries a Contractors Equipment Floater with $250,000 maximum per scheduled item, a $50,000 blanket on small tools, and worldwide territory. A storm floods a job site, damaging a $180,000 skid steer and $22,000 in scheduled hand tools and small equipment. The carrier pays the scheduled skid steer at replacement cost less the $5,000 deductible and pays the small tools loss within the blanket limit. Total recovery is roughly $192,000 net of deductibles.
Common Mistakes
- 1Failing to update the equipment schedule when the contractor purchases or rents new units, leaving recently acquired equipment uninsured.
- 2Setting a blanket small tools limit too low to cover the actual exposure, which is often understated by the insured at application time.
- 3Omitting leased and rented equipment coverage when the contractor signs rental agreements requiring the renter to insure the unit.
- 4Choosing Actual Cash Value when newer equipment exists in the fleet, leaving the insured short on replacement cost after a total loss.
How brokerageaudit.com Handles This
Submission Intake captures equipment schedules from contractor applications and rental agreements, building the schedule directly into the policy file. Policy Checker confirms scheduled limits, blanket sub-limits, and territorial scope match the binder, and Renewal Manager prompts annual schedule reviews 90 days before renewal.