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The right Inland Marine coverage adapts to new needs.


Market pressures and the introduction of new technology require contractors to do more with less. Their equipment coverage should support a more streamlined way of doing business.

The U.S. construction industry has enjoyed steady growth for the past decade as the economy clawed its way out of the Great Recession, benefitting from a healthy housing market and demand for infrastructure improvements.

That demand, however, soon threatens to outstrip what contractors are able to supply. Thanks to global trade tensions and new tariffs, the cost of raw materials jumped by 7.4% in 2019, according to the Associated General Contractors of America.

A skilled labor shortage also limits the number of projects general contractors can take on. In the first quarter of 2019, 70% of firms included in the USG Corporation/U.S. Chamber of Commerce Commercial Construction Index said they struggled to meet deadlines and 40% said they were forced to reject new projects.

The emergence of new technology, however, offers potential solutions. High-tech tools that can shave inefficiencies, boost productivity and prevent losses help contractors stick to budgets and timelines without extra manpower.

Tech’s growing role on the job site
Perhaps the greatest impacts of technology on the job site are improved productivity and loss control. Take for example, wearable sensors, which let foremen know exactly where their workers are, how much time they are spending on a specific task, and if they are adhering to the work schedule. More advanced sensors can also detect biometric parameters such as body temperature, heart rate and perspiration that could signal overheating and prompt workers to take a break and cool down.

Property sensors that detect moisture or extreme temperatures can alert site managers early to the possibility of a leak or fire, allowing for a faster response and damage mitigation. Drones provide an aerial view of the site and allow for more detailed inspections. Smart project management dashboards store vital information like subcontractor credentials, timelines, budgets, and real-time productivity analysis.

Though not yet widely adopted, automated and semi-automated machinery is likely to make its way onto job sites once the technology is tested and safety best practices are established. These machines could take over more repetitive and arduous tasks like bricklaying, speeding up the work and easing the pressure of the labor shortage.

AXA XL’s Contractors Equipment Coverage Solutions is not linked to a job site but to the property itself, meaning contractors need just one policy to keep their equipment protected.

The emergence of the agile contractor
Technology alone isn’t the panacea to construction’s challenges. Smaller and mid-size contractors have also adjusted the way they do business to adapt to market headwinds and stay competitive with bigger players. To take advantage of new projects, they have to be agile and mobile, able to move between and manage multiple projects at a time. 

That means they may not work out of a brick-and-mortar central office, but a trailer that goes from site to site. Instead of a main computer server, they may rely on a cloud-based platform and a laptop that goes where they go. 

And the property they need protected goes beyond tangible things like wood, steel, trucks and rigs. As connected sensors and semi-automated equipment play a bigger role, the data they generate becomes almost as valuable as physical equipment. 

But there’s one thing slowing down this technological advancement and movement toward agility: insurance. Not all contractors’ equipment insurance policies are built to support mobility or accommodate high-tech equipment. 

For most businesses, the property coverage available is linked to a specific location. Though the property is the similar, contractors need a separate policy to insure equipment at each site and while in transit, increasing the likelihood of a coverage gap and the certainty of headaches for contractors who would rather focus on their business.

Brokers and agents have repeatedly voiced how their middle-market clients needed simpler, more streamlined coverage that follows them from site to site. In other words, they need insurance that enables growth instead of stifling it. 

A new way to cover contractor’s equipment
AXA XL’s experienced team of inland marine underwriters responded to these concerns by crafting Contractor’s Equipment Coverage Solutions, which is broader than the industry standard and includes 33 additional coverages. Furthermore, one of the key differences lies in coverage of “property that supports your business”. This creative and scalable solution is built directly into the Covered Property grant. It includes business personal property (BPP) as well as other property and inland marine coverage, such as Computer Equipment, Media and Data. 

AXA XL’s Contractors Equipment Coverage Solutions is not linked to a job site but to the property itself, meaning contractors need just one policy to keep their equipment protected, encompassing everything from computers and data to drones and heavier equipment like forklifts and graders. 

This reduces the administrative burden of ensuring seamless coverage across multiple projects, and also makes filing a claim easier in the event of a loss. The process will be the same no matter where the property was damaged. In fact, AXAXL now has a claims portal that allows you to submit a claim online, which expedites the claims settlement process.

The inclusion of coverage for riggers’ legal liability also rounds out a product designed to address the realities of the job site. The process of securing a crane and rigging up equipment is typically not an easy or fast one. To get multiple cranes onsite and have more than one operating at a time - depending on the size of the site - could pose unnecessary safety hazards or potentially slow down the project’s progress. 

It’s not uncommon for one subcontractor to borrow another’s rig or ask for help hoisting something. And most contractors won’t think to say “no” due to insurance reasons. The priority is getting work done efficiently. Any damage incurred in that process, however, would not normally be covered under a commercial general liability policy, which excludes coverage for another party’s property while it is in the insured’s care, custody or control. 

Carriers may add riggers’ legal liability to CGL policies via endorsement, but AXA XL affirmatively covers this risk in its Contractor’s Equipment Coverage Solutions policy form. This allows contractors to focus more on the task at hand, and worry less about the boundaries of liability. More importantly, it allows for the collaboration on the job site that is necessary to keep projects moving forward. 

Looking forward
Construction will continue to change as new tools, new demands and new pressures shape the way work is done. Technology will keep evolving, minimizing some exposures while introducing new ones. The need for major infrastructure overhauls will require contractors to work together on a scale they likely never have before. Designing adaptive, climate-resilient structures will make every project that much more challenging. 

The best underwriters do more than assess and price the risks associated with these changes - they anticipate them and work with clients to adapt coverages to their needs.

About the authors
Shane Kula is an executive underwriter for AXA XL’s Inland Marine business in New York and Russell Crooks in AXA XL’s Field Director for Inland Marine insurance, based in San Francisco.

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Global Asset Protection Services, LLC, and its affiliates (“AXA XL Risk Consulting”) provides risk assessment reports and other loss prevention services, as requested. In this respect, our property loss prevention publications, services, and surveys do not address life safety or third party liability issues. This document shall not be construed as indicating the existence or availability under any policy of coverage for any particular type of loss or damage. The provision of any service does not imply that every possible hazard has been identified at a facility or that no other hazards exist. AXA XL Risk Consulting does not assume, and shall have no liability for the control, correction, continuation or modification of any existing conditions or operations. We specifically disclaim any warranty or representation that compliance with any advice or recommendation in any document or other communication will make a facility or operation safe or healthful, or put it in compliance with any standard, code, law, rule or regulation. Save where expressly agreed in writing, AXA XL Risk Consulting and its related and affiliated companies disclaim all liability for loss or damage suffered by any party arising out of or in connection with our services, including indirect or consequential loss or damage, howsoever arising. Any party who chooses to rely in any way on the contents of this document does so at their own risk.

US- and Canada-Issued Insurance Policies

In the US, the AXA XL insurance companies are: AXA Insurance Company, Catlin Insurance Company, Inc., Greenwich Insurance Company, Indian Harbor Insurance Company, XL Insurance America, Inc., XL Specialty Insurance Company and T.H.E. Insurance Company. In Canada, coverages are underwritten by XL Specialty Insurance Company - Canadian Branch and AXA Insurance Company - Canadian branch. Coverages may also be underwritten by Lloyd’s Syndicate #2003. Coverages underwritten by Lloyd’s Syndicate #2003 are placed on behalf of the member of Syndicate #2003 by Catlin Canada Inc. Lloyd’s ratings are independent of AXA XL.
US domiciled insurance policies can be written by the following AXA XL surplus lines insurers: XL Catlin Insurance Company UK Limited, Syndicates managed by Catlin Underwriting Agencies Limited and Indian Harbor Insurance Company. Enquires from US residents should be directed to a local insurance agent or broker permitted to write business in the relevant state.