Contractors Equipment Insurance

Contractors’ equipment (CE) insurance is designed to insure machinery, equipment and tools of a mobile nature that may be away from your locations listed on a property policy. The definition of contractor’s equipment also includes the vehicles that are primarily used to carry mounted equipment and vehicles that may be designed for highway use but are not licensed and not operated on public roads.

This coverage is useful for any business that has tools and equipment that may be away from the locations listed on your property insurance. It can also be used to provide physical damage coverage to specialty vehicles such as cranes, concrete pumps, and other special construction vehicles. The policy can offer a method for physical damage for off road vehicles.

For businesses that have this exposure and have included this equipment as contents values, you may want to explore if a CE policy would offer broader off-premises coverage and a more competitive rate than contents.

Equipment Schedule

The policy depends on the schedule of equipment. The schedule may be attached to the policy and made part of the agreement, or it can be a “schedule on file.” This is an important distinction as a scheduled equipment policy covers only those items on the schedule. The “schedule on file” option allows some additional flexibility as it can cover equipment in your “care, custody and control” which could be leased or rented equipment. It may also allow you to update the schedule during the policy period.

Valuation

The standard valuation for most CE policies is Actual Cash Value (ACV) which is the value of your equipment with age, condition and depreciation considered. You may request Replacement Cost (RC) which does not include depreciation in the valuation. While some would say that RC is new for old, most policies limit your recovery to the amount scheduled for that item. If you want true RC coverage, you must insure RC values.

Additional Coverages

Most carriers have multiple CE forms, and they change the additional coverages built into the form.

Debris removal may be a flat dollar amount or a percentage of the value of the item in question. If your jobsites are very remote or waterborne you may need additional debris removal dollars to recover a damaged piece of equipment.

Leased and rented equipment coverage is often needed. If not included, you need to endorse the policy for this coverage.

If you loan equipment to others, you need to cover this exposure in the event the other party lacks coverage.

Fraud and deceit coverage would protect you against fraud that causes you to lose equipment.

There are specific coverage limits for waterborne equipment to cover values in this environment.

Other coverages that may be included or endorsed to the policy:

Construction trailers – Employee tools – Fire department service charge – New purchased property (subject to a time limitation) – pollutant cleanup – Fire extinguisher recharge – Rental reimbursement- Stolen equipment reward – Spare parts and fuel

Risk Management – Theft prevention

• National Equipment Register (NER)– There is no standard format for CE serial numbers, so law enforcement does not have a good way to identify stolen equipment. NER offers a registration service for your equipment and can alert law enforcement if it is stolen. www.ner.net

• Good serial number and equipment schedule data. If you cannot accurately report the year, make model and serial number of a stolen item, you may have a challenge settling the claim for this undefined item. You will not be able to offer police the data needed to identify your property.

• Equipment location services may be built into your newer equipment. There are many vendors offering GPS location devices for equipment.

• Equipment ID via paint and colors. The default equipment color is yellow and that makes stopping equipment in transit unworkable for law enforcement. Having a distinctive color scheme or logo will aid in equipment identification.

• Unique keys for the equipment. You can order a ring of standard CE keys online. Changing the ignition on your equipment will make it harder to steal.

The Driehaus Difference

We have access to multiple markets for your CE exposures. We can help with risk management tips and improving your schedules and equipment data to make your policy stronger and make a recovery possible. Call 513-977-6860 or use our web site tools to contact us. We want to be your insurance provider.