Here’s a little insurance trivia….
The 19th century French term en bloc, meaning “all together or all at the same time”, was used to describe insurance policies covering multiple perils or coverages, usually for a dealer. Think Jewelers Block or Furriers Block – the first “all risk” policies dating from the 1900s. Before then, businesses purchased policies for different perils. Block inclusive contracts also extended coverage to furniture, fixtures and tenant’s improvements and betterments, largely eliminating the need for separate inland marine or property forms.
Convenient and cost effective, it was a novel concept at the time. Today, Block policies apply to businesses beyond jewelers, but with the same intent: target an industry and offer multiple coverages under one policy form.
But, be careful. Not all policies are en bloc. What should you look for when insuring your contractor’s equipment? Here are seven helpful tips!
1. One Coverage Form, Not Many
Check if there is an additional coverage for computer equipment, media, data, valuable papers and records, tenant’s improvements and betterments, office furniture and supplies, and other business personal property. If not, you will need separate property or inland marine coverage forms. This can be expensive for the insurance carrier to issue, make for a long policy contract, and potentially involve multiple deductibles for the same loss. Also ensure that coverage applies if the above property is owned by you as well as leased or rented by you from others.
2. Words Matter
You’re running a contracting business and have several different jobs going on at once. Suddenly, equipment being used on one job is needed for another project. The foreman is on a tight schedule, so he rents the needed equipment, which you are required to insure for $250,000. You are not concerned when he signs the rental agreement, but…
Wouldn’t you know it – the equipment is stolen that night. Gone for good. The rental agreement requires insurance for Replacement Cost valuation, but your insurance policy only provides Actual Cash Value. It does not reflect your Legal Liability, up to Replacement Cost, should you rent equipment from others. The equipment is only worth $200,000 ACV, however, so you must pay $50,000 out of your own pocket to the rental company.
Ouch.
Know the coverage your policy provides, and where the gaps are. Look at the Property Not Covered section to determine what types of property are not covered by your policy. Read the Exclusionssection, because even when property is covered, not all causes of loss are insured. Then read the Valuation provision to see what amount your property is insured for. Lastly, learn about Additional Coverages or Coverage Extensions to understand how your indemnity might be enhanced.
3. Show Me You Care
You care about your property – so much, in fact, that you paid to equip it with a Global Positioning System or register it with the National Equipment Register. Unfortunately, your equipment still was stolen. Does your insurance carrier recognize that you went above and beyond?
With a Deductible Waiver, an insurance company can waive the deductible you would have to pay due to theft or conversion if your property is equipped with an operational Global Positioning System tracking device or similar electronic tracking device or chip. Alternatively, the insurance carrier may waive the deductible if you register the property on the National Equipment Register database prior to the date and time of loss.
A deductible can be a sizable expense for you – often starting at $1,000 – so this makes a big difference.
