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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
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.
Inland Marine
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.
Equipment Floater
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.
References
- International Risk Management Institute: Glossary
- Rough Notes: Contractor's Equipment Coverage Forms
- Packaging Digest. "Mitigating packaging damage in the supply chain." Accessed June 22, 2020.
- Risk and Insurance. "A Brief History of Marine Insurance." Accessed June 20, 2020.
- Encyclopaedia Britannica. "Excluded perils." Accessed June 20, 2020.
- Forbes. "Want To Know The Future Of Food Trucks In 2019? Read This Report." Accessed June 21, 2020.
- Encyclopaedia Britannica. "Marine insurance." Accessed June 20, 2020.
- Chubb. "Our History." Accessed June 21, 2020.
Writer Bio
Living in Southern California, Tom Zuo is a risk-management professional with decades of experience. He has been writing since 1985, specializing in topics related to insurance and risk management. Zuo holds a Bachelor of Arts in English and mass communication.