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Here are some possible loss scenarios:
Karen is hauling a bulldozer from Chattanooga to a jobsite in Knoxville. Black ice causes her vehicle to lose traction, the trailer jackknifes, and the bulldozer flips off. Her contractors’ equipment coverage pays the costs to retrieve it and tow it to back to Chattanooga for repairs as well as the costs to repair it. It also pays the cost to rent a bulldozer to complete the job in Knoxville.
Orion Highway Builders installs an asphalt batch plant adjacent to its road construction project. Orion believes it is a safe location and does not hire 24-hour security. One night, a group of teenagers visits the site to test their climbing dexterity. As the hours pass, the drinking increases and their behavior turns destructive. They even start a fire when they leave. The volunteer fire department responds when a local farmer notices the flames, but the damage is extensive. The cost to repair the damaged equipment is high, but not as high as the extra expense incurred to keep asphalt available for the job and to keep Orion from incurring a delay of construction penalty.
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The market is wide open for contractors' equipment exposures. Andy Roe, commercial lines underwriter for Arlington/Roe & Co., Inc., says, “In our capacity as an MGA, we place accounts with Lloyd’s, American West Home, Nautilus, and Northfield. On the brokerage side, we work with Allianz, Chubb, and other traditional admitted markets." Chandra Kwaske, underwriting manager at the Michigan branch of Burns & Wilcox, says that she places risks with Markel, Great American, Fireman’s Fund, Max Specialty, Argonaut, and Scottsdale.
“Some of our admitted carriers, such as Century Surety, offer this coverage on a limited basis, subject to more stringent underwriting guidelines,” adds Gabriel Derzhavets, vice president at Roush Insurance Services. “Our surplus lines carriers, including Markel companies, Scottsdale, and Atlantic Casualty, also write contractors’ equipment coverage, using slightly more liberal underwriting requirements.”
Jennifer Rudisel, equipment underwriter at Britt/Paulk Insurance Agency, Inc., says “We place this business with American Alternative Insurance Corporation, an A+ admitted carrier.”
Alistair Barnes, executive vice president of AmWINS Brokerage of Texas and leader of AmWINS Energy Practice, also uses only one market. AmWINS has a special program with Lloyd’s of London and London companies directed toward equipment used in the energy industry. However, it also covers non-energy equipment, such as a recent quote for $14 million of contractors' equipment going to Haiti for use in demolition, renovation and rebuilding.
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