May 8, 2020
DO’S AND DON’TS OF CONTRACTORS EQUIPMENT INSURANCE
The Valeri Agency is recognized as a leader amongst businesses in Southeastern Wisconsin for all of their insurance needs. We provide solutions and answers to a variety of businesses, from the mom and pop store near Lake Michigan to the larger employers out near I-94.
One particular area of specialty for us is building contractors. There are dozens of contractors in the Kenosha/Racine area and we are proud to provide answers to many of them when it comes to what is and isn’t covered. They turn to us to design a policy that is unique and specific to the type of business they are in and quite often there are coverage lines that they hadn’t anticipated.
Tools and equipment coverage is one area that is often overlooked or under-insured. Losses from theft or damage can be quite substantial. Having adequate insurance for tools and equipment allows our friends in the contracting business to move ahead on projects in a timely and professional manner, keeping their customers from experiencing frustrating delays.
There are several specific areas of coverage that contractors need to be aware of. These include:
Small Tools and Clothing Policies offering coverage for small tools and clothing normally place limits on the “per item” replacement cost as well as the “per occurrence” cost. A typical policy may limit coverage to $500 per item and $2500 per occurrence. Items that are covered include those on-site as well as those in transit.
Unique Tools and Equipment The limits stated above under Small Tools and Clothing can be specifically extended for tools and equipment that qualify as “unique”. These vary by industry, but your agent can assist with providing answers as to whether your unique equipment would qualify for a specific listing. In those cases, it is not unusual for the limits to be $500 for one item and $10,000 for one occurrence.
Rented/Borrowed Equipment Contractors often lend equipment to other contractors as well as borrow equipment themselves. A professional insurance agent like those at the Valeri Agency will provide coverage for both of those situations. For example, your policy might provide up to $50,000 in coverage for equipment that you have lent to another business or individual under a written agreement. Likewise, your policy might allow for up to $100,000 in coverage for equipment belonging to others if it is damaged while in your possession. In-transit equipment coverage is also available to contractors who have exposure in this area.
Stolen Tools/Equipment Most policies include coverage for theft of your tools and equipment. Although these policies normally have a deductible, it is important for you to ask your agent about the possibility of waiver of the deductible if you have taken steps to guard against theft. For example, if your specific equipment has been outfitted with a tracking device (GPS) and you list it on your policy schedule, sometimes the deductible can be waived.
Cleanup Resulting from Equipment Damage If your equipment experiences a breakdown that results in the need for remedial environmental actions, your policy should have language that protects you up to certain dollar limits. The cost of cleanup of a loss that is covered often includes when a piece of machinery leaks fuel or hydraulic fluid and you are legally obligated to remediate the pollution. A typical policy would provide up to $25,000 of coverage for this type of event.
The Valeri Agency works closely with our partners at West Bend Mutual Insurance Company in our commitment to staying abreast of the best coverage for our partners in the construction industry. Contractors interested in learning more about coverage for machinery and equipment should read this blog provided by our partners at West Bend. If you have questions about your existing policy or if you are new to the business and want to work with professionals who are experienced in designing comprehensive protection for contractors, call the Valeri Agency today.