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Is your client's equipment adequately insured? 3 critical questions contractors must answer

In this article, we address three critical questions that contractors must answer to determine if their equipment is adequately insured.

Contractors' Equipment insurance is a specialized form of inland marine insurance that provides comprehensive protection for mobile equipment and tools used by trade contractors. While this coverage offers numerous benefits, it is often misunderstood, leading to confusion among contractors when it comes to adequately protecting their equipment. In this article, we will address three critical questions that contractors must answer to determine if their equipment is adequately insured.

1. Do I lease or rent equipment from others?

Many contractors rely on rented or leased equipment for specific projects. It is important to note that most contractors' equipment insurance policies include coverage for equipment leased from others. This coverage ensures that contractors are protected against any damage the equipment sustains during the lease term.

2. Do I transport equipment from job to job?

Contractors often need to transport their equipment from one job site to another. Unlike commercial property insurance, which typically only covers property stored at a fixed location, contractors' equipment insurance provides specific coverage for equipment and tools in transit. This means that if a contractor's equipment or tools are stolen or damaged during transportation, relying solely on a commercial property policy may not provide adequate coverage. Additionally, it is worth noting that commercial auto and general liability policies often exclude coverage for mobile equipment in transit. Contractors should be aware of these limitations and consider the benefits of contractors' equipment insurance to ensure comprehensive protection for their equipment during transportation.

3. Do I store equipment in off-site storage locations or job sites?

Contractors often store their equipment at off-site storage locations or job sites other than their primary business premises when not in use. Fortunately, contractors' equipment insurance typically provides coverage for equipment stored in these locations. This coverage ensures that the equipment is protected against theft, damage, or other covered perils that may occur while it is not in use.

Is the answer to one or more of these questions, 'yes'?

By addressing these critical questions, contractors can make informed decisions about their insurance coverage and effectively mitigate potential risks associated with their equipment. If the answer to one or more of these questions is 'yes', it is crucial for contractors to explore contractors' equipment insurance as a policy to fill potential gaps in coverage. By understanding the specific coverage provided by contractors' equipment insurance and reviewing their existing policies, contractors can ensure they have the necessary protection for their valuable equipment. Taking proactive steps to secure comprehensive coverage allows contractors to focus on their work with peace of mind, knowing that their equipment is adequately insured and their business is protected.