The
Contractors Equipment policy is designed to cover all types of mobile
equipment used away from the primary business location. This may
include anything from a large piece of construction equipment, small hand
tools, mobile electronics to a camera. To be eligible to be placed
on this type policy, the items may not be licensed for road use and must
be owned or leased by the business for use in business operations.
Additionally, equipment which you rent or lease to others is not
eligible. Don't schedule your personal boat or ATV's on your
business policy!
What
it Covers
The
policy provides coverage against all-risks of direct physical damage to
covered property except those specifically excluded in the policy.
Liability coverage for use of these items in your business is
automatically included under the general liability policy. The
all-risk wording is similar to a standard property policy, but does differ
slightly. Standard exclusions include: mechanical breakdown, wear
and tear, employee theft, war, voluntary parting; overloading; loss while
water borne. Notice that most basic causes of loss are covered,
including fire, theft, windstorm and vandalism. Standard policies do
not contain an exclusion for flood and earthquake, but this is not the
case on all policies.
Coverage
Extensions
The
standard policy will provide four coverage extensions. These may
be broadened or new ones added by certain insurance companies.
Debris
Removal - Any expenses to remove debris from a covered item created by a
covered cause of loss is included.
Pollutant
Cleanup and Removal - Expenses to extract pollutants from land or water
due to their release from a covered item may be covered.
Rental
Expense - Your cost to rent replacement equipment due to a covered loss
of an item may be included with a daily limitation.
Fire
Department Service Charge - Costs from a responding fire department to
save or protect covered equipment are covered.
Who is Covered
This is a
first party policy, providing protection against loss of your
property. The named insured is almost always the business. As
with a property policy, the interest of a lien holder on a piece of
equipment may be protected by adding them as an additional insured.
Limits of
Insurance
Two types of
limits are provided under the Contractors Equipment Policy. Large,
expensive pieces of equipment are usually scheduled individually.
This will include a complete description along with a specific
value. Small hand tools, typically between $100-$1,000 in value, may
be insured for their total value as unscheduled equipment. This does
not require them to be individually listed. All losses under a
Contractors Equipment Policy are adjusted on an Actual Cash Value.
When selecting your limit of insurance, be sure you are using a value
based on the current value of the item, not a brand new one.
Additionally,
a coinsurance clause applies to all limits. The standard limit is
80%. Coinsurance is a tool used by the insurance industry to make
certain that adequate limits of coverage are carried on property.
Basically, it requires that any item is covered for at least 80% of its
value at time of loss. If the limit is inadequate, the amount paid
for a claim will be reduced. The formula for determining a penalty
is as follows:
-
Find the
required amount of coverage on the item -- multiply the value at time
of loss by the coinsurance percentage.
-
Divide
the required amount, by the amount of coverage carried.
-
Multiply
that amount by the total loss to determine the amount payable
Deductible
Deductible amounts
begin at $250. Higher deductibles will help reduce your premium.
When selecting a deductible, take into consideration the lowest value of small
tools you may be insuring. If you have a $1000 deductible, there is no
reason to insure a $250 item.
Now
you know what it is..... See what it cost!
For a detailed premium quotation, click
here!
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