Contractor’s Equipment Risk Control 
Most losses to contractor’s equipment occurs at the jobsite or while it is in transit. Values for the equipment can start as low as $5 for a hammer and exceed $500,000 for a backhoe. The most common causes of loss include theft, fire, overturn, vandalism, and boom collapse.
Be aware that contractor’s equipment is a target for theft. In addition:
• Most thefts are on a “stolen to order” basis often carried out by well-organized groups.
• Thieves posing as contractors steal equipment by indicating they are transporting
equipment from one jobsite to another.
• Lack of security at jobsites results in a greater frequency of thefts.
• Utilizing the Contractor’s Equipment Crime Prevention Checklist will provide you many
useful ideas for safeguarding your equipment against theft.
To help prevent fire loss to your equipment:
• Complete regular preventative maintenance by a qualified mechanic.
• Check for loose fittings in the fuel and hydraulic systems.
• Keep maintenance records on all the work that is done.
• Eliminate hazards prior to refueling (i.e. prohibit smoking, dispose oily rags in a metal
receptacle with a self-closing lid, and clean up spills immediately).
• Avoid parking vehicles next to wooded areas where wild fires could strike
To reduce the chance of overturn and collision:
• Train equipment operators on the maximum slope that equipment can be safely operated.
• Make operators aware of the equipment limitations (i.e. wide turning radius).
• Since jobsite conditions change quickly, have operators dismount and walk around their
equipment after it has been stopped for any length of time.
To limit your vandalism exposure at jobsites:
• Establish a secure, lighted, and fenced area
• Post “Warning” and “No Trespassing” signs
• Hire a security company to provide night and weekend patrols
To prevent boom collapses from occurring:
• Hire experienced crane operators, check references, and conduct testing
• Seek manufacturer’s assistance to provide operator safety-training classes
• Maintain your equipment regularly by using only qualified mechanics
Contractor’s Equipment Checklist
Transportation Risks
The purpose of transportation insurance is to provide coverage for the property you own while it is in transit. You can insure property you own that is being shipped by you to others or property that is being shipped by others to you.
It is important to understand when the change of ownership takes place. Depending on the terms of the contract, property in transit may be owned either by the company sending the goods (the shipper) or the company receiving the goods (consignee).
• If the goods are shipped Free On Board (F.O.B.) Shipper’s Location, the company sending
the goods owns them until they are taken by the carrier. At that point the company who will
receive the goods becomes the owner. In this case the consignee needs transportation
insurance to protect its financial interest while the goods are in transit. This is the most
common shipping arrangement.
• If the goods are shipped Free On Board (F.O.B.) Consignee’s Location, the company
shipping the goods owns them until they are delivered to the consignee. In this situation,
the company shipping the goods needs transportation insurance.
While truckers have some liability for the goods they carry, the owners of goods still need transportation insurance for their property in transit because:
• Contract carriers may be liable only for their own negligence.
• Under the terms of a shipping document, known as a released bill of lading, a common
carrier is not required to reimburse the shipper of goods for the full invoice cost.
• Payment of claims by the trucker’s insurance company could be delayed.
There are a variety of transportation insurance coverages, also known as transit insurance, that are available to meet your needs. Your agent can help you decide what is best for you.
Transportation Checklist
Installation Risks
The machinery, building materials, and supplies that you install in the course of your project are not usually covered under your standard property policy. The purpose of installation coverage is to provide all-risk coverage against loss or damage to the items that will become a permanent part of the project.
Installation coverage may be written to cover property where the work is being performed, while in transit and during temporary storage after it has been designated for permanent installation. You would need separate coverage for machinery, tools, equipment and similar property, which will not become a permanent part of the installation project. For example:
• Air conditioning units and duct work that will be installed in a building would be considered
covered property since it would become a permanent part of the building
• Furniture that is moved into a building would not be covered under an installation floater
because furniture is not a permanent fixture.
The primary exposures of installation risks are vandalism, theft, fire, and water damage. To protect your property against loss, there are some risk control measures you should consider putting into place. Our
Installation Floater Checklist provides some useful ideas for protecting against these losses.
Some large projects take several months or even a year or more to complete installation and final testing. It’s important that you protect and safeguard your investment. Be sure to review your exposures and coverage needs with your agent to be sure you are adequately insured.
Electronic Data Processing (EDP)
Much of today’s business is conducted with and through computers. Computers are used in all areas of operations, such as record keeping, billing, communication, word processing, product design, and research. Included in this coverage are the software programs and the information stored on them.
There may be some coverage under your property policy for EDP. You need to review your coverage needs with your agent to see what works best for you.
Whatever you decide, it’s always a good idea to take reasonable precautions to avoid a loss. At the very least, a computer loss will be a big inconvenience. At worst, it might even threaten the survival of your business. The
Electronic Data Processing Checklist
provides some useful guidelines for minimizing and controlling your EDP risk and reducing your exposure to loss.
For more information on Inland Marine Risk Control techniques, check with your FCCI Loss Control Representative and go to the Inland Marine section of the
Blueprint for Safety Online Risk Control Manual.
This manual is advisory only and does not attempt to list all potential hazards or identify all possible remedial actions. You are responsible for the safety of your premises, operations, and products. FCCI Insurance Group and its affiliates and subsidiaries shall not be liable for any loss, injury, death, damage, or expense arising from the use of this manual.
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