Equipment Floater

Equipment Floater - Insuring Mobile Tools and Equipment

In plain language: Equipment floater insurance is like a safety net for your movable business equipment. If your tools or equipment – like saws, cameras, computers, generators, or more heavy-duty items like excavators and skid steers – get damaged, lost, or stolen while off-premises, this coverage can help replace or repair them. 

Technical definition: Equipment floater insurance is a form of inland marine insurance that offers broad protection for tools, equipment, and machinery that are transported from place to place. Typically found within commercial property insurance or as a stand-alone policy, equipment floater insurance is often associated with industries that frequently transport high-value equipment, such as construction, landscaping, and photography. 

Imagine your contracting business is using an expensive backhoe at a client's site, but overnight it gets stolen. Now what? Commercial property insurance won’t cover it because it was off your property. That’s where equipment floater insurance comes into play. 

TL;DR

Equipment Floater is a type of insurance that covers mobile or transportable business equipment. 

It's key for industries that frequently move expensive equipment, like construction or photography. 

A common misunderstanding is that commercial property or auto insurance will cover these items—they usually don’t. 

A quick win for agencies: Regularly review clients' equipment lists to ensure all valuable items are covered. 

What Is an Equipment Floater in Insurance?

An equipment floater is an insurance policy that provides protection for your mobile or transportable business property when it's off your business premises. This coverage is essential because your traditional business property coverage only applies to equipment that stays at the insured location. Additionally, your commercial auto insurance only covers equipment while it's being transported—not when it's on a job site or in storage off-site. 

Equipment floater insurance, which is a type of inland marine insurance, fills that coverage gap. From smaller tools like drills and hammers to larger machinery like riding mowers and loaders, if it gets lost, stolen, or damaged while it's away from your business premises, equipment floater insurance coverage can help you repair or replace it. 

But remember, this often varies by state and carrier; always check the specific policy form. 

Key Related Terms to Know

Inland Marine Insurance – Coverage designed for items in transit or movable property. 

Commercial Property Insurance – Coverage for your business property like buildings, fixtures, and stationary equipment. 

Commercial Auto Insurance – Coverage for your company vehicles and equipment in transit. 

General Liability Insurance – Protection against third-party claims for property damage or bodily injury. 

Additional Insureds – Other parties that your policy can be extended to cover, usually required by a contract. 

Common Questions About Equipment Floater

What types of businesses need equipment floater insurance? 

Industries using high-value mobile or transportable equipment often need equipment floater insurance. This includes construction companies using machines like scaffolding, ladders, forklites, and compressors. Equipment floaters are also useful for specialty contractors who use tools like hammers, drills, and saws; photographers with pricey camera equipment; contractors who use computers or servers; and landscapers who use equipment such as excavators, skid steers, and riding mowers. 

What does an equipment floater policy cover? 

Equipment floater insurance covers your mobile business property for various perils including theft, vandalism, fire, and certain types of water damage. The coverage applies regardless of the location of the property, making it excellent protection for businesses that frequently move their equipment. For example, If a photographer's camera was stolen during a wedding shoot, or if a contractor's scaffolding is damaged in transit, their equipment floater insurance would kick in. 

Are there any limitations with equipment floater coverage? 

Yes, like all insurance policies, equipment floater insurance has limitations. Normal wear and tear, deterioration, and mechanical breakdown are typically not covered. Furthermore, loss due to improper use of equipment or incidents involving untrained operators are usually not covered. 

How is equipment floater insurance different from general liability insurance? 

While both policies provide necessary coverage for businesses, they serve different purposes. Equipment floater insurance is specifically for loss or damage to your mobile equipment and tools. On the other hand, general liability insurance protects against third-party claims for bodily injury or property damage. For instance, if a contractor's drill causes injury to a third-party, general liability would cover it, not equipment floater. 

Equipment Floater vs. Business Property Coverage

Equipment Floater and Business Property coverage are two different types of insurances that deal with a business's property. 

Real Claim Examples Involving Equipment Floater

Scenario 1: A landscaping company's riding mower was stolen from a client's property. They filed a claim with their equipment floater insurance, got approval, and were able to replace the ride-on mower, helping them to continue their services without significant downtime. 

Scenario 2: A professional photographer was hired to cover a beach wedding. Unfortunately, a sudden wave came crashing, damaging thousands of dollars worth of camera equipment. The photographer filed a claim with his floater insurance and was able to replace the camera gear without hurting his business. 

Scenario 3: A construction company rented an expensive roller compactor for a large job. The machine was inadvertently damaged due to a subcontractor's error. Though the subcontractor didn't have insurance, the construction company’s equipment floater insurance covered the repairs, minimizing its losses. 

Limitations and Common Mistakes

Equipment floater insurance does not cover ordinary wear and tear or equipment breakdown over time. 

This policy would not cover the loss of tools or equipment due to theft if reasonable security measures weren't in place. 

Construction companies often rent equipment. If the rental company doesn’t insure their equipment, you could be liable for damages, so always check your equipment floater. 

Often businesses under insure their equipment because they underestimate the total replacement cost of all their equipment. 

How to Explain Equipment Floater to Clients

Personal Lines client "You know your homeowner's insurance doesn't cover your professional equipment, right? An equipment floater can cover your tools or equipment like cameras or computers, no matter where you take them." 

Small Business owner "If you have tools or equipment you’re taking offsite, our equipment floater policy could help. For instance, if your generator is stolen from a jobsite, this coverage can help you replace or fix it." 

CFO or Risk Manager "An equipment floater can complement your commercial property coverage by insuring valuable tools or equipment while they're off-premises. It’s a critical coverage to consider for any business that's deploying high-value equipment offsite."