Because you and your landscape equipment are on the move each and every day, ordinary property insurance is not enough to cover the risk of having your equipment stolen or damaged.
Property contents coverage for a building will only cover equipment if it is inside the building or within 100 feet of it. Equipment floater insurance, on the other hand, is a type of inland marine insurance designed to cover equipment owned by a business and used on jobsites.
Equipment floater insurance:
- Covers your equipment from a number of perils at any location in the United States
- Is typically quite affordable
- Can often be packaged into the same policy with your general liability and other business insurance coverages.
Many insurance carriers offer different coverage terms and conditions, because equipment floater insurance is not written on a standard insurance contract used by all carriers, as is the case with general liability insurance. That’s why it’s important to ask a lot of questions before purchasing this type of insurance.
Is Theft Covered? – Equipment theft represents your biggest exposure to loss, and has become an even bigger problem during this recession. However, some policies exclude this cause of loss from the coverage while others put restrictions on it. Ask your insurance agent if theft is covered on the policy and what limitations there are.
Replacement Cost Value or Actual Cost Value? – If your business has a claim, there is a difference in the amount you will recover if the policy was based on replacement cost value or actual cost value.
Replacement cost value has a slightly more expensive premium. However, it will pay the cost to purchase a replacement piece of equipment with one of like age and usability to get you back to work.
Actual cost value will only allow the claims adjuster to pay the current value of your equipment. Replacing a two-year-old commercial mower is usually more expensive than the actual worth of that mower.
Deductibles – A typical deductible for equipment floater insurance is $500 for each occurrence. Check the deductible on your policy to see what it is, and if it applies per occurrence or per item.
Limit on Value of Unscheduled Equipment – Some policies will pay a maximum of $1,000 for every piece of equipment that is not scheduled on the policy while others will pay a maximum of $2,500. Make sure that your mowers and other pieces of equipment exceeding this limit are individually scheduled on the policy.
Rented or Leased Equipment – If your business rents or leases equipment, you may need to purchase an endorsement to cover that equipment on your policy. There may also be additional limits that apply to these pieces of equipment. You should thoroughly communicate this issue to your agent and double check your quotes to make sure this is properly covered.
New Equipment Purchases – During the course of a typical one-year policy period, you will more than likely make many equipment purchases. Ask your insurance agent if your policy allows a 90-day grace period from the time of purchase for these items to be added to the policy. Without that addition to the coverage, you will need to endorse your policy immediately after each equipment purchase for those items to be insured.
The rate for individually scheduling pieces of equipment on the policy by their year, make, model, value and identification number will keep your premium substantially lower than by not scheduling those items. Typically the rate for scheduled equipment is a fourth of the rate for unscheduled equipment values, and you avoid the coverage limitations on those pieces of equipment as noted above.
Overall, an equipment floater insurance policy is an affordable and valuable risk financing tool for landscapers of all sizes. Just keep in mind that when considering these policies, you should pay attention to the unique specifics of the coverage that is offered.
Drew Roberts is an insurance agent who specializes in providing business insurance to Florida landscapers.