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Written in Conjunction with Builders Risk Policies

Summary: The typical builders risk policy covers only property on the described premises. Neither does it provide coverage for the property while in transit. An installation floater covers a certain type of property while that property is being installed and, to a degree, while in transit. Usually purchased by a contractor or a subcontractor, the installation floater covers expensive types of property being installedsuch as machinery or generators. Insurance Services Office, while offering a builders risk policy in its commercial property portfolio, does not offer an inland marine installation floater. The standard in this line comes from the American Association of Insurance Services (AAIS), Installation Floater Coverage, IM 7100. This article examines the AAIS installation floater.

Topics covered:

Property coverage Perils and exclusions Conditions Endorsements

Property Coverage

The AAIS installation floater provides coverage for materials, supplies, fixtures, and equipment the insured is installing, constructing, or rigging as part of an installation or construction project and that will become a permanent part of the insured’s project.

The property described as “not covered” more clearly defines the purpose of this form, i.e., to cover only certain types of property while being installed. One group of the items not covered is “buildings, structures, or land.” While most property policies do not cover land, this form clearly excludes buildings or structuresagain covering property being installed.

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