Equipment floater insurance is a form of property insurance that covers loss of or damage to equipment that is moved from one location to another. It is different from standard property insurance, which covers real property and personal property that are generally expected to be in one location. Equipment floaters can be written as individual policies or as an addition to a standard property policy.
Property insurance is known as a first-party coverage in that the parties to the insurance contract are the insured and insurer. There is no third party as in liability insurance policies that cover bodily injury or property damage to others. Equipment floaters are categorized as property insurance such as builders risk, inland marine and boiler and machinery.
Within the various types of property insurance, equipment floater insurance is more specifically defined as a form of inland marine coverage. Inland marine insurance provides coverage for property that is not and cannot be permanently affixed to a single location. This insurance can cover property in transit but can also extend to many other types of property. Inland marine insurance developed out marine insurance, which was derived from the original method of transporting goods, but when land transportation developed the need for inland marine insurance was born.
The most common items covered under equipment floaters include construction equipment such as bulldozers, backhoes and other similar equipment. These items are easily transported from one job location to another and cannot be covered under the terms of a traditional property insurance policy which is underwritten based upon the property being in a single, specific location. Equipment floater insurance covers some of the risks unique to mobile equipment such as transit exposures as well the theft exposures that come from not being regularly stored in a secure location.
What is Covered and What is Excluded
Common items excluded from equipment floater include automobiles, aircraft and watercraft -- vehicles that are not true equipment and should be more appropriately covered under different insurance.
While policy forms vary from one to the other, the usual exclusions to equipment floater coverage are hazards not considered accidents but reasonably foreseeable such as mechanical breakdown, wear and tear and improper loading or use of the equipment.