Who insures switchgear, chillers and generators before they are installed and accepted?

What does each policy cover?

Builder’s risk insures the structure under construction and the materials that will become part of it. The owner or the general contractor usually buys it. An installation floater insures specific property that a contractor is responsible for delivering and installing. FC&S describes it as usually purchased by a contractor or subcontractor to cover expensive property being installed, and gives machinery and generators as examples.

There is no ISO installation floater. FC&S notes that the standard form in this line is the AAIS Installation Floater Coverage, IM 7100. An insurer may use its own wording, so the terms below are a reference point and not a description of your policy. FC&S describes that form as covering materials, supplies, fixtures and equipment that the insured is installing and that will become a permanent part of the project. It does not cover buildings or structures, and it does not cover the insured’s own machinery, tools or equipment.

Which policy responds at each stage?

Why doesn’t general liability fill the gap?

General liability insures your liability to others. It is not property cover for equipment in your hands. The standard form CG 00 01 excludes property damage to personal property in the care, custody or control of the insured, and to that particular part of real property on which you are working if the damage arises out of the work.

The form also expects a property policy to be there. Its Other Insurance condition makes general liability excess over any builder’s risk, installation risk or similar coverage for your work. So if a chiller is dropped during rigging or a switchgear lineup is flooded in a staging yard, the question is which property policy insures it and for whose benefit, not whether general liability will step in.

What makes long-lead electrical and mechanical equipment different?

• Risk of loss. Switchgear, chillers and generators may be shipped and stored before the building is ready for them. Read the purchase order and the subcontract for who bears the risk of loss in that period.
• Contract requirements. Some owners put the floater on the contractor. The State of Oregon’s standard clause requires the contractor to carry one for equipment to be installed, in transit or stored off site, and says cover should run until the state accepts the installed equipment.
• Storage conditions. The AGC’s 2026 paper on data-center construction notes that builder’s risk policies typically exclude moisture in the atmosphere and corrosion, which can bar recovery for equipment stored temporarily in damp or uncontrolled conditions.
• Warranty. The same paper notes that manufacturers may void a warranty if equipment is not stored properly, and that many builder’s risk policies do not treat a voided warranty as direct physical damage.
• Owner-furnished equipment. If the owner buys the equipment and you install it, ask in writing who insures it from delivery until acceptance.
• Your own tools and rigging gear. Neither policy is written for them. The AGC paper notes that builder’s risk commonly excludes machinery used in the construction process, and the AAIS floater excludes the insured’s tools and equipment.

What do I ask before the equipment ships?

• Am I an insured under the project’s builder’s risk policy, and has its insurer waived recovery against subcontractors?
• What are its limits for transit and for off-site storage, and do they reach the value of one shipment?
• Who pays the deductible if the loss is to my scope?
• When does cover end for my equipment: at installation, at acceptance, at substantial completion or at first use?
• Is testing and commissioning covered, and under which policy?

Related questions

Is an installation floater the same as builder’s risk?

No. Builder’s risk insures the structure and the materials going into it, and is usually bought by the owner or general contractor. An installation floater insures the property one contractor is installing, including in transit and in storage, and is usually bought by that contractor.

When does installation floater coverage end?

Under the AAIS form reviewed by FC&S, at the earliest of six events: the policy expires or is cancelled, the purchaser accepts the property, your insurable interest ends, the project is abandoned, the project has been complete for more than thirty days, or the property is put to its intended use. Other insurers’ forms may differ.

Does an installation floater cover my tools?

Not under the AAIS form, which excludes the insured’s machinery, tools and equipment. FC&S notes that another type of policy is available for that purpose.