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Question on Insurance Policy for Construction - Can you help?

March 19, 2008  |  from Markup and Profit Blog

Mike Davis, who comments here from time to time, sent in the following note.

    Michael,

    My insurance agent met with Tammy and I last week and made a proposal to sell us an installation floater with our insurance policy. I have never heard of it before. What is covered is machinery, materials, equipment, supplies and fixtures that are destined to be used in or are incidental to the installation, completion, or repair of the projects. It covers a direct loss involving a “collapse” of all or part of the building caused by fire, lightning, windstorm, hail, explosion, smoke, aircraft, vehicles, riot, civil commotion, vandalism, breakage of glass, falling objects, weight of snow, ice or sleet, water damage, hidden decay, hidden insect or vermin damage, weight of people or personal property, weight of rain that collects on a roof, or use of defective materials or methods of construction, remodeling or renovation if the collapse occurs during the course of the construction, remodeling or renovation. They will not pay for loss caused by governmental action, nuclear hazard, war and military action, building ordinance, water that comes from a ground source, or earth movement i.e.. earthquake.

    I have no idea if this is a good idea or not. Have you heard of this? Or is it just another way for the insurance company to take money and the agent to get a commission? Does that sound untrusting of insurance companies?

    What do you think?

    Mike Davis, CGR, CAPS
    TMT Home Remodelers

any comments? Anyone been approached by their agent or broker with this type of policy, or experienced a claim related to it?

Filed: Risk-Insurance