The industry for contracting equipment is a cyclical business for underwriters that depend on the economic condition and strength of the construction industry. It’s best to work with companies who are who are established in the industry and are financially sound.
Coverage forms provide coverage a broad range of contracting equipment including newly purchased items, borrowed items, debris removal, and replacement items. There are important elements that have to be written into coverage including coverage territory, exclusions, etc.
There are three common risks and hazards that underwriters have to consider when underwriting for the of contracting equipment. Fire is the number risk and hazard for contracting equipment. Fires are started due to poor maintenance and upkeep of equipment.
Theft and vandalism are also a serious problem when underwriting for contracting equipment. Over $300 million is lost annually due to the theft and vandalism of equipment. Transit is the third most prevalent risk associated with underwriting for contracting equipment. Equipment can easily be damaged or lost while in transit to the construction site.
Miscellaneous equipment is not included in underwriting because these items are not covered by policies. These items include scaffolding, false work, forms, and spare parts. It is the contractor’s responsibility to establish an inventory system to account for these items.