Installation floater and builders risk policies are common types of insurance required for solar contractors and solar installers…
But what is an installation floater and how is it different from builders risk insurance?
To find out why SunPower and other solar materials suppliers sometimes require contractors to carry installation floater or builder’s risk policies, and what the differences are… Read on!
What’s an Installation Floater?
An installation floater is an insurance policy that covers business property that is to be installed, fabricated or erected during an installation phase, or construction process, of a building being renovated, upgraded or remodeled.
An installation floater covers the property, such as solar equipment (panels, inverters, racking systems, storage, etc.) that is owned by the solar contractor that is to be installed, fabricated or erected by the contractor for the client and that will become a permanent part of your installation or construction process. The installation floater may also cover the cost of labor during the process, however, this may be a supplemental coverage for an additional cost.
The word “floater” is used because the policy provides coverage without regard to the location of the property covered. “Floater” is another term for inland marine coverage.
Floaters are typically written on the IM 7100 form1, a “special perils” (also known as an “All Risks”) form. Special perils means that the installation floater covers any risk except those that are specifically excluded in the form. Examples of excluded perils are flood, earthquake, fraud, missing property, etc.2
Insurance Claim Example
To use SunPower as an example, an installation floater protects the certified SunPower distributor’s equipment (panels, inverters, racking systems, storage, etc.) in the event of a covered loss prior to installation, whether that property that is in transit, on a job site or in storage.
You load your SunPower panels onto your truck to deliver to a client installation site in Connecticut.
As you are driving to the job site you hit a pothole the size of a garbage truck (welcome to Connecticut!) and hitting this pothole is very jarring, causing dents in the frames and cracks in the majority of the panels on the truck.
The damage to the panels would be covered by the installation floater.
Another example is a solar contractor who slips on a roof (luckily he’s wearing a harness) but the panel slips and falls to the ground and lands on a stack of panels and solar equipment on the ground, causing significant damage.
This equipment which is going to be part of the installation on the job would be covered under the installation floater.
SunPower requires this type of insurance because they don’t want your business to be put out of business due to either an accident on the job, or having to come out of pocket to replace the cost of any damaged panels.
How Is It Different Than Builders Risk?
Installation floaters are often placed with, but are not the same thing as, a builders risk insurance policy.
A builders risk policy is broader than an installation floater.
Whereas installation floaters will NOT cover buildings, a builder’s risk policy covers buildings as well as business property and also lost income or time invested in a project that is lost due to a covered cause of loss.
Like an installation floater, a builder’s risk policy is written on a “special perils” (also known as an “All Risks”) form.
Special perils means that the installation floater covers any risk except those that are specifically excluded in the form.
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