Whether a new construction build, major renovation project or kitchen remodelling job, no contractor should overlook the necessity and value of an installation floater. Get a quick primer on what it is and how it protects your finances.
Construction and renovation jobs are rife with risks that can cause financial ruin for any contractor, including being reimbursed for paying for the raw materials and items you acquire to install at a jobsite.
That’s why no contractor should overlook the necessity and value of an installation floater, whether you’re working on a new construction build, a major renovation project or a kitchen remodelling job. Moreover, having an installation floater demonstrates your commitment to safeguarding the required materials, which can enhance your client’s trust and confidence in you.
Let’s review what an installation floater is, how it ensures your projects can continue without financial setbacks caused by unforeseen incidents, and how it differs from other coverages, such as builders’ risk and tools and equipment insurance.
What is an installation floater?
An installation floater is a type of temporary insurance that protects property or materials in storage at a jobsite, while in transit or during the installation process until they are installed.
An installation floater’s purpose is to protect a contractor’s finances if those materials are damaged by fire, in an auto accident, extreme weather, theft or vandalism before fully installed in or on a building.
For example, suppose you purchase an expensive marble sink for a bathroom renovation project on behalf of a client to install in their home. While driving back to the client’s residence, another vehicle rear-ends your van at an intersection and the marble sink in the back of your van cracks in half. Your client won’t reimburse you for the damaged sink since it was wrecked while in transit, so you’re out a couple of thousand dollars.
Another scenario could be if a storm damages the materials you’ve purchased for a roofing project before they’re installed.
In both instances, an installation floater would cover the cost of the damaged materials.
What does an installation floater cover?
Beyond the example of damaged materials above, an installation floater covers a wide range of items depending on the coverage details. These items may include:
- HVAC systems
- Electrical systems for wiring, conduits and other electrical components
- Plumbing fixtures, including pipes, fittings and related plumbing materials
- Industrial machinery and equipment that’s to be installed in a facility or shop
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What does an installation floater not cover?
Installation floater insurance coverage can vary from one insurance provider to another, so it’s crucial to know exclusions apply to your policy. Some items aren’t covered by an installation floater, including:
- Tools, equipment and machinery that won’t become part of the installation (more on that below)
- Plants, trees or shrubs
- Temporary structures, including scaffolding, fencing or cribbing
- Cash
- Property sent via an airplane unless it’s a regularly scheduled flight
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Installation floater vs. builders’ risk insurance: What’s the difference?
Whereas builders’ risk insurance, or course of construction insurance, covers an entire construction project — the structure under construction and materials at the site – it may not cover the same transit and installation risks addressed by an installation floater.
So, while builders’ risk insurance is vital to cover losses and damages to a structure under construction and the materials already at the jobsite because of fire, vandalism or theft, it’s not designed to cover those materials that need to be transported to the site before they’re installed.
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How does an installation floater differ from tools and equipment coverage?
Tools and equipment insurance covers the gear you own, lease or rent to do a job if they’re stolen, vandalized or damaged by fire or severe weather. This policy doesn’t cover the materials you need to build or install for a project as an installation floater does.
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How to get an installation floater fast
The most efficient way to get an installation floater for your next project is through a licensed business insurance broker. A broker can shop for affordable coverage on your behalf and ensure that coverage is customized to address your risks adequately.
Aharhsan Thangarasa is a licenced broker and senior team lead, contractors at Zensurance.com, Canada’s leading source for small business insurance. Get a free quote for your insurance needs by visiting Zensurance.com/DCN.
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