As a contractor, subcontractor, renovator, or landscape designer, you likely already have contractor insurance. However, it doesn’t cover everything you think it might. The materials you use to complete a job may not be protected unless you have installation floater insurance.
You may be asking yourself, ‘what is installation floater insurance?’ In short, it helps fill the gap in coverage that’s typically not included in your standard contractor insurance policy. It will provide coverage for property at a temporary site, while in transit, or during the installation process.
The coverage begins as soon as the property leaves the premises where it’s picked up (such as a home improvement store or manufacturer) until it’s installed. This coverage will limit potential losses if the property is damaged, lost, or stolen before the final installation is complete.
Installation Floater Insurance Coverage Basics
Installation floater insurance protects a contractor’s property or materials at a temporary site, while in transit, or during the installation process until it is installed at the job site.
For example, let’s say you’re installing new bathroom vanities, sinks, and faucets for a customer. The client has found what they want at a variety of different stores, meaning you have to travel and pick up every item at different locations across the city.
Your first stop is the sink manufacturer’s warehouse. You inspect it, and everything looks fine. Along the way from the sink manufacturer to a home improvement retailer, a driver cuts you off, and you slam on the brakes to avoid getting into an accident. You think nothing of it because you wrapped up everything carefully. But when you arrive at the customer’s home, you notice one of the $2,000 marble sinks has cracked in half.
The customer won’t cover the cost because the damage occurred while it was in transit. And the manufacturer won’t pay for it because there were no signs of any defects before you left the warehouse.
The $2,500 profit you were expecting to make on this job is gone, and you’ll lose money before you even start installing everything. You may also need to delay the start of the project and not meet your deadline, which can delay future scheduled projects with other clients.
That’s why having installation floater insurance is such a good idea. With it, the damaged materials are covered, and the loss will turn back into a profit because the insurer will pay for the costs of the items that are damaged, lost, or stolen.
What Isn’t Covered by Installation Floater Insurance?
Installation floater insurance coverage can vary from one insurance provider to another, so you should review your policy to find out what’s excluded. Some items aren’t typically covered by this type of insurance, such as:
- Tools, equipment, and machinery that won’t become part of the installation
- Plants, trees, or shrubs
- Temporary structures, including scaffolding, fencing, or cribbing
- Cash
- Property sent via an airplane unless it’s a regularly scheduled flight
- Property sent via a ship unless it’s being transported by a carrier for hire
Who Needs Installation Floater Insurance?
Installation floater insurance is needed if you’re the one transporting materials to a client’s home or place of business. You should also get it because accidents can happen on the job. For example, if you drop a vanity sink at the job site and it’s no longer usable, or the tiles and flooring are stolen when the property is unoccupied, installation floater insurance will cover the cost of replacement materials.
At the end of the day, anyone in a profession that’s in the business of building or installing expensive items (decks, kitchen cabinets, flooring, HVAC systems, etc.) needs this type of coverage.
Builder’s Risk vs Installation Floater Insurance
Builder’s risk insurance, also known as course of construction (COC) insurance, protects the building and the liability during the project’s life. You should require the home or business owner to get this type of insurance. Builder’s risk insurance is typically needed for major renovations, new construction, or adding an addition or second story to a home.
This type of insurance covers the building, materials at the job site, and liability if there’s physical loss or damage because of an insured event, such as vandalism, theft, or fire.
While it appears you won’t need installation floater insurance, materials located at the site are only covered with builder’s risk insurance, not those you still need to transport or items that break just before installation.
What’s the Difference Between Installation Floater and Tools and Equipment Insurance?
Installation floater insurance is designed to protect the cost of replacing the materials used. On the other hand, tools and equipment insurance covers the cost of replacing the tools and equipment used during the installation process if they’re stolen, lost, or damaged.
They’re two different types of coverage; having both will protect you from potential losses.
Optimum Protection for Contractors
Protecting the cost of the materials you use before they’re installed can save you from additional costs during a project and give you peace of mind in the event construction materials are lost, stolen, or damaged. That’s a good reason why you should consider getting installation floater insurance.
Get covered quickly and easily through Zensurance. Fill out our online application in a few clicks to get a free quote. Our brokers will take the hassle off your hands by shopping our partner network of over 50 insurance providers to get the protection you need at the best price.
— Reviewed by Jon Hogg, Team Lead, Digital Solutions Team, Zensurance.
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