Installation Floater – Coverage for Materials Awaiting Installation
In plain language: An Installation Floater provides insurance for property (materials or equipment) that is waiting to be installed or is in the process of being installed. Think of it as coverage for a new kitchen stove that gets damaged in your driveway before it gets in your house.
Technical definition: An Installation Floater refers to a policy or an endorsement that covers personal property intended to become a permanent part of the insured structure, during transit to the job site, upon arrival, and throughout the installation process. It is typically associated with inland marine policies but can be found within property insurance policies as an optional coverage.
Imagine ordering new dining room furniture, only to have the truck catch fire en route and destroy every piece. Do you bear the loss or does the furniture store? In the insurance world, an Installation Floater can help answer that.
TL;DR
What Is Installation Floater in Insurance?
Building on the definition, an Installation Floater kicks in to cover the value of materials or equipment from the moment they're in transit to their final installation. It bridges the gap in property coverage that usually only covers already completed structures or installations.
This form of coverage is found in the inland marine section of property insurance, acknowledging the unique risks involved. It relates to broader coverage concepts such as builders risk insurance, which might also provide some protection for materials during construction.
An important distinction in Installation Floater is its applicability to 'movable' property. While property insurance focuses on immovable, permanently installed property, Installation Floater is all about items that aren't fully part of the property yet.
Key Related Terms to Know
Common Questions About Installation Floater
Does a typical property insurance policy include Installation Floater coverage?
No, Installation Floater is typically separate from standard property insurance. While property insurance covers the existing structure and personal property within it, Installation Floater specifically covers items that are not yet installed, from the time they leave the retailer to the moment they're installed on your property.
Who needs an Installation Floater?
Installation Floater is essential for entities undergoing construction or significant renovation projects. For instance, a hotel undergoing renovation may need an Installation Floater for the expensive new fixtures or custom flooring that will be installed. Similarly, if a restaurant is installing a new high-end commercial oven, they would want an Installation Floater to cover it while in transit and during installation.
Can Installation Floater coverage be cancelled once the installation is done?
Yes, but it's often kept active if the insured frequently has material being transported and installed. For example, a renovation company may maintain Installation Floater coverage as a business standard due to the continual flow of materials in transit and installation.
Installation Floater vs. Builders Risk
Builders Risk and Installation Floaters have overlapping functions but each has distinct applications.
|
Comparison Area |
Installation Floater |
Builders Risk
|
|
Primary use case |
Covers property in transit and during installation |
Covers property during construction |
|
Coverage / concept type |
Inland Marine / Property |
Property |
|
Typical exclusions |
General wear and tear, government action, war |
General wear and tear, employee theft, natural disasters (unless specified) |
|
Who is most affected by errors |
Entities undergoing installations or renovations |
Construction companies, building owners |
|
Common mistakes |
Assuming Property Insurance provides enough coverage |
Misjudging the length or cost of a project, leading to underinsurance |
Real Claim Examples Involving Installation Floater
Scenario 1: A retailer was having a high-tech security system installed. During transit, the truck was involved in an accident and some of the expensive equipment was damaged. Thankfully, their Installation Floater covered the loss.
Scenario 2: A restaurant was installing an outdoor patio featuring custom-made, imported tiling. A sudden, unexpected storm damaged much of the tiling after it had been delivered but before installation could start. Their Installation Floater responded to cover the damage.
Scenario 3: A company was adding a new server room, complete with state-of-the-art technology. A small fire during the construction phase caused damage to several of the servers that were awaiting installation. The Installation Floater provided coverage for the damaged servers.
Limitations and Common Mistakes
How to Explain Installation Floater to Clients
Personal Lines client: "Think of Installation Floater as insurance for anything that hasn't become a permanent part of your property yet. For instance, a new refrigerator getting damaged in your driveway before it's moved into the kitchen. You want coverage for that time between purchase and installation."
Small Business owner: "You know how cargo insurance covers goods shipped by sea? Installation Floater is like that, but for materials or equipment you're planning to install at your business. Whether in transit or onsite awaiting installation, they can be covered under this policy."
CFO or Risk Manager: "Installation Floater provides coverage for equipment or materials that is in transit to your site or awaiting installation at your site. This protects financial investment in these goods against perils such as transit accidents, theft, or other damage, ensuring that the installation process can proceed as planned even after a loss."