Is your Bobcat or forklift insured?

In Newsletter Content by Brandon St. Clair

Did you know that there are at least two types of insurance that you will need to commercially operate mobile equipment like a bobcat/skid steer, wheel loader or forklift?  Often, at the time of purchase (and especially if financing is involved), insured’s will call us and say, “I need coverage for my equipment.”  What the seller of the equipment is always going to require is physical damage coverage against causes of loss such as theft, fire and vandalism.  As they technically still own the equipment, the finance company wants their asset covered.  Insured’s are then often mistakenly under the belief that once they purchase this coverage (usually referred to as an Inland Marine policy), they are “good to go.”  However, an Inland Marine policy does not cover any bodily injury or property damage to others that might be caused by the insured’s use of the equipment.  This coverage is provided under a separate, General Liability, policy.   The two policies work hand-in-hand to make sure that (1) the insured’s equipment itself is covered against physical damage/loss and (2) any property damage/bodily injury to others that the equipment might cause, is also covered.

For certain classes of business, such as Excavation or Land Grading, a valid state contractor’s license may be required to obtain General Liability coverage if the insured is getting paid to do work “by the job” and those projects are over a certain amount (such as $500, in the State of California, for example).  Keep in mind that even though you might not intend to use your equipment for commercial purposes, you will want to have GL coverage in place before you ever do.  If you take a moment to consider the “who or what” that could be hurt by your equipment you may come up with several scenarios.  Here are just a few:  backing into “someone” that you didn’t know was behind you, running over or digging into utility infrastructure or when a child climbs on your equipment, while parked, and then falls off.

A General Liability policy is always good to have in place regardless of the type of business you run.  A GL policy provides coverage that is intended to be “general” in nature so as to cover a variety of scenarios where the unintended or unanticipated unfortunately occurs.  Other than those areas that are specifically excluded (of which there are several and should be reviewed), a GL policy can be there for you when the coverage from other policies does not apply.  Just remember that an Inland Marine policy is only there to protect your equipment but a General Liability policy’s purpose is to protect your entire business.