Contractor’s Equipment 101

This page is meant to serve as a 101 educational resource for Contractor's Equipment insurance.

Contractors Equipment Insurance is a type of Inland Marine insurance.

Contractors Equipment Insurance is a specialized type of insurance designed to protect the equipment and machinery used by contractors. This coverage is essential for businesses involved in construction, landscaping, road building, and other similar industries where heavy and expensive equipment is used.

Eg: A landscaping company owns a variety of equipment, including mowers, and tractors. While working on a large commercial landscaping project, they store some of this equipment overnight at the job site. One morning, the project manager arrives at the site to find that the tractor, which is worth $50,000, has been stolen. The Contractors Equipment insurance will cover this loss.

Here are key features of Contractors Equipment Insurance:

1. Coverage for Equipment: It covers various types of contractor equipment, including but not limited to bulldozers, cranes, backhoes, excavators, forklifts, and even smaller tools and equipment. This can include owned, leased, or rented equipment.
2. Protection Against Various Risks: The policy typically protects against risks like theft, vandalism, fire, and weather-related damage. The exact coverage can vary based on the policy and the insurance provider.
3. Replacement Cost Coverage: Many policies provide replacement cost coverage for lost or damaged equipment, which means the insurance company will pay to replace the equipment with a new item of like kind and quality, minus any applicable deductible.
4. In Transit and Off-Site Coverage: Contractors Equipment Insurance often includes coverage for equipment while it is being transported from one job site to another, as well as while it is being used on a job site other than the contractor’s primary place of business.
5. Customizable Limits and Deductibles: The policy can usually be customized to the specific needs of the contractor, including adjusting coverage limits and choosing deductibles.
6. Exclusions: Common exclusions might include mechanical breakdown, wear and tear, and employee theft. Some policies might exclude certain types of equipment, so it's important to understand the specifics of what is and isn't covered.
7. Additional Coverage Options: Contractors may also opt for additional coverage options like rental reimbursement (covers the cost of renting equipment while the insured item is being repaired) or business interruption (covers the loss of income resulting from equipment breakdown).

Contractors Equipment Insurance is crucial for safeguarding the significant investment contractors make in their equipment. Without this insurance, contractors could face substantial financial losses in the event of damage or theft of their equipment, potentially impacting their ability to complete projects or continue operations.