What is contractors equipment inland marine coverage?

IRMI defines an equipment floater as "property insurance covering equipment that is often moved from place to place," and classifies it as inland marine. Inland marine forms often cover property wherever it is, which is why they are called floaters.

Your other policies leave this gap for different reasons:

• General liability covers your liability to others. Exclusion j.(1) in the ISO form removes damage to property you own, rent, or occupy.
• Mobile equipment liability is covered in the GL, but IRMI notes that "physical damage coverage is usually provided by an 'equipment floater.'"
• Business auto covers vehicles. The ISO GL definition of mobile equipment says self-propelled vehicles with permanently attached air compressors, pumps, generators, and "well servicing equipment" are treated as autos, not mobile equipment.

That last point matters for oilfield fleets. A pump truck or rig-up truck is an auto for liability purposes. Make sure every unit, and the equipment mounted on it, is on either the auto schedule or the equipment schedule, and not missing from both.

Most oilfield MSAs say who bears the loss of each side's equipment. The IADC model U.S. daywork contract is a useful reference:

IRMI notes contractors equipment coverage is a nonfiled line in many states, meaning insurers are not required to file forms and rates for approval, and coverage is often written case by case. That makes these questions worth asking every time:

• Scheduled or blanket. Is each item listed with a value, or is there a blanket limit for unscheduled tools? What is the per-item maximum on unscheduled items?
• Valuation. Are losses paid at actual cash value or replacement cost?
• Rented and leased equipment. Does the policy cover equipment you rent from others? Rental agreements often make you responsible for it. See the care, custody, or control exclusion.
• Below ground. Does the form exclude equipment while downhole or underground? If so, does your MSA put that risk on the operator?
• Cranes and booms. IRMI notes floaters normally exclude booms over a specified length while in operation unless damage is caused by a named peril; boom coverage is added by endorsement.
• Breakdown. Is mechanical or electrical breakdown covered, or only external causes like fire, theft, collision, or overturn?
• Employee tools. Are tools your hands own covered while on your job?

Equipment coverage is only as good as the list behind it. Keep a schedule with make, model, serial number, year, and value, and update it when you buy, sell, or move equipment between companies. A unit bought mid-year and never added is a common way to end up uninsured on the one piece that burns.

For more on how equipment fits the rest of your program, see our oilfield equipment insurance page and what insurance a new oilfield service company needs.