Openstep Installation Floater
In any business, minimizing financial risk is critical. The same applies to not just commercial but industrial business owners. In some situations, it is crucial to provide a further-reaching, more comprehensive insurance policy to minimize expensive losses that could occur. A very common area where some companies suffer loss is in the “in-between” periods.
This is when installation floater insurance becomes critical in your operation. What Is Installation Floater Insurance?When you hire a contractor to install a piece of equipment at your location, you expect to walk into your plant, see it in place, and not have to worry about it again. However, what if something happens to that equipment from the time that you purchase it until the time the contractor installs it?
In some situations, if damage occurs to it during that period, you may have to foot the bill for a replacement on your own, unless you have installation floater insurance.This type of inland marine coverage helps to provide financial coverage to you, as the property owner, when you hire a contractor to install equipment for you. If the company you hire to do this type of work lacks the right kind of insurance, and those pieces of equipment are damaged in transit, this type of policy can provide financial protection to you.
What Does Installation Floater Insurance Cover?It’s essential to know the details of the policy written for you. Most policies will cover property that is being installed as well as fabricated for your needs. It may also cover equipment that is being erected by a contractor. It applies from the time you purchase that property until the installation of the equipment is accepted by you. This does not cover mistakes made by your employees or any type of damage that occurs after the piece is in place and operational, though. Additionally, it only covers damage to the equipment, not any type of worker or contractor injury.Installation floater insurance is a must for many industrial business operations receiving, modifying, and updating their equipment. It can give you the financial peace of mind you need when investing in large and expensive types of equipment that are difficult to replace.
Don’t assume the contractor is liable for your losses here. Be sure you have comprehensive protection in place first with this form of inland marine insurance. Will Installation Floater Insurance Help You?If you’re unsure how well installation floater insurance can fit your business’s needs, give our team a call. We’re happy to help you find the right type of coverage for your industrial operation. ENGS Insurance Agency (EIA) has over 30 years commercial insurance experience and provides industry leading insurance solutions. We also offer Point-of-Sale insurance products for equipment financed with ENGS Commercial Finance (ECF)- one of the oldest, strongest and most respected lender in the U.S. Whether it is Construction Equipment, Industrial Equipment or Transportation/Truck for Hire, we are eager to meet the needs of our customers with an insurance product that meets all regulatory requirements.
So I have a solar contractor that has a trailer filled mostly with materials such as copper wiring, pipe, and connectors. The total value is about $15,000. He also has about $4,000 in tools/equipment. So I had a policy quoted for Tools/Equipment along with an Installation floater and the premium for the installation floater portion was about $2,400. On a $5,000 job, it is mostly labor and the materials amount to about $300 (the solar panels are not his legal responsibility according to contract, based on what he is telling me). His estimated installation receipts are about $800,000.
Openstep Installation Floater Replacement
So he is having a hard time reconciling the premium vs. Assuming a rate of.30 per $100 of receipts, the premium of $2,400 to cover $15,000 worth of materials seems excessive to him and in his mind it is not commensurate and he is asking me to speak to underwriters to see if anything different can be done, which is not likely. Other than 'that's just the way it is in your situation', do any of you have a way to explain why installation receipts is an appropriate rating basis for this risk? Hi Rob,Good question and this is one that trips almost every insurance professional up.The accurate rating basis for an installation exposure is:Estimated Average values at risk per jobXEstimated number of jobs under construction at any one time.(This is calculated by: average duration of a job/ 365 days) x the estimated number of annual jobsThat gives you the correct exposure base to apply a rate to.In your example, the only missing piece of information is the average duration of a job.Say, for instance, your contractor spends 5 days per job and completes 10 jobs per year. The calculaton would be:(5/365) x 10or.137Take the.137 pro-rata factor and multiply it by the estimate average value at risk of $300 and you get an exposure base of:$42.The.30 assumed below would be applied to that $42 figure, not to annual receipts.To your broader question, that seems like an absolutely crazy premium for such a small exposure.
Installation Floater Coverage
You may want to make sure that your underwriter knows (and understands) that your client isn't responsible for the installation of the actual solar panels. That might make all the difference in the world.Good Luck!US.