While most new construction equipment comes with a GPS system, many insurance companies are now demanding it on older, larger and more valuable equipment, too, says Chris Haag, vice-president with Wilson M Beck Insurance Services Inc.
Insurance
Technology can be a big help, but there is still no substitute for common sense.
That was one of the many messages that came through recently at a seminar on bonding and insurance sponsored by the Vancouver Regional Construction Association.
Speaking on insurance was Chris Haag, vice-president with Wilson M Beck Insurance Services Inc. Dealing with equipment theft is an area where the commonsense approach comes to the fore. It is not uncommon for expensive construction equipment to walk away from a site – even in the middle of the day, he said. Hagg gave the example of a so-called “employee” showing up on a site and identifying himself as the man hired to operate a Bobcat. A few hours later the superintendent on the job realizes that both the Bobcat and the driver have vanished never to be seen again.
In another case a crew with a flat-deck truck turned up to move (steal) an excavator that was parked on a side street.
As soon as it was moved however the GPS system on the machine alerted the owner and the RCMP. The thieves were soon caught. The morale of the story is simple, says Haag. “GPS works.
While the system is on most new equipment, consideration should be given to putting it on older larger valuable items.” A GPS unit costs only around $1,000 he said and added that many insurance companies are now demanding it.
He also warned contractors at the seminar that in these boom days equipment is in huge demand and used equipment is not depreciating at nearly the same rate it did only a few years ago.
It is important that equipment owners keep this in mind while insuring their equipment and make sure their coverage is adequate. It’s also a good idea to maintain a happy relationship with your local equipment dealers, he said.
After a loss it might take a long time to get a replacement. Hopefully it might be a bit faster if you are on friendly terms with your dealer. On top of that, though, it is a good idea to make sure your equipment insurance provides coverage to rent replacement machines.
In the complex area of liability insurance Haag covered many points. At the end of the day, though, he said one of the most important decisions a contractor can make is to pick the right broker at the beginning.
They are not, he said, all created equal. Make sure, he advised them, to place their coverage with good insurers who have their own claims department staffed with trained and experienced personnel.
There are some adjusters who understand construction projects and others who simply do not, he said. “Some adjusters and examiners know their stuff and some don’t”, he warned.
It is common, said Haag for project owners to buy the insurance for a job.
This is a trend that has developed over the past five to seven years. It came about largely because the cost of insurance has escalated dramatically since 2001 and some general contractors were unable to even buy insurance as a result of the legal mess surrounding the leaky condo situation.
In reality, he said, general contractors should be purchasing their own project insurance.
Having someone else do it, he said, is like having a third party hire or manage your banking, legal or accounting relationships.
“Should an owner insist on insurance placement and provide a compelling reason to do so the general contractor has to be involved in the placement process, including limits purchased, deductible chosen and when coverage is to be bound.
It also has to be made clear that the general contractor has the ability to manage and coordinate claims on the job site.
“Remember,” he told the seminar, “you are responsible for everything to do with the site including mitigating site damage and deductible payment as required. Time is money!”
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