How well do you know your contractors’ equipment policy?

Posted by John Cofini on Wed, Aug 07, 2013 @ 06:07 PM

As a contractor, you know how crucial it is to have the right tools and equipment for every job. It can mean the difference between finishing a project on schedule and suffering costly delays. And since your tools and equipment are among your biggest expenses and most valuable assets, it’s just as crucial to have the right contractors’ equipment insurance to protect them.

But do you really know what’s in your contractors’ equipment policy?

Kicking back in a recliner and diving into an insurance policy probably isn’t your idea of a relaxing evening. But it’s important to spend some time getting to know your contractors’ equipment coverage. If you don’t, it could literally cost you a fortune.

What do you need to know?

The more you delve into the details of your policy, the more knowledgeable you’ll be about it. Contractors’ equipment policies can vary greatly from one insurance company to another, and you want to make sure you get coverage that’s custom tailored to your business and your needs. But even if you prefer to leave it to your insurance provider to explain the fine points, you should educate yourself on some key points.

Of course you should always thoroughly review the insuring agreement. But make sure you don’t skip over key sections such as property not covered, exclusions, and loss valuation clauses. These all play an important role in your coverage, your premiums, and what gets paid on a claim. And you don’t want to find out after a loss that you’re not covered.

Here are some key points to familiarize yourself with before purchasing your next contractors’ equipment policy: 

  • Property not covered. Knowing exactly what your policy covers and what it doesn’t can save you a lot of time, money, and headaches. 
  • Exclusions. Policy exclusions vary by insurance company, and restrictions of coverage can often be found in different sections of the policy, not just the “exclusions” section. Again, make sure you know what’s covered and what isn’t.
  • Deductibles. Pay particular attention to whether the deductible is “per-item” or an “occurrence.” 
  • Accurate inventory. Undervaluing or failing to list certain equipment can leave you without coverage. 
  • Blanket limit of liability. Always arrange for coverage on a blanket basis. 
  • Equipment valuations. Coverage should be on either a replacement cost or an agreed amount basis. You should generally avoid actual cash value (ACV) valuations when negotiating terms, although they could apply to some older equipment. 
  • Rented equipment. Find out if your policy includes coverage for rented and borrowed equipment.

There are many more fine points to your contractors’ equipment policy, so take time to educate yourself. After all, this is critical protection for your operations.

If you want a contractors’ equipment policy that will be effective and affordable, see the experts at BNC Insurance and Risk Advisors. We’ll construct a policy that’s aligned with your needs – and your bottom line. 

Tags: milbrandt, contractors equipment insurance, contractors equipment policy