Builder's Risk and Installation Floater for Colorado Contractors

Your equipment policy covers the machine. It does not cover the material the machine is placing. A lot of hardscape, irrigation, and site crews are standing in that gap without knowing it, because the two policies share a family name (inland marine) and nobody said they are different forms. Here’s what builder’s risk and an installation floater typically do on a Colorado job, which one you buy, and where the seam runs.

What it does on your job

A hardscape crew is building a segmental retaining wall in Castle Pines. Expansive clay, so the base is over-excavated and the drain rock and geogrid are stacked on site with three pallets of block. Friday night a truck backs up to the lot and Monday the block is gone. Or the weekend brings a hail cell off the Palmer Divide, the swale above the lot runs, and course six of the wall is under a foot of washed clay. Under most installation floater forms, that’s the claim: the stolen materials at what you paid for them, or the wall in progress and the materials it took to get there, less the deductible.

Same idea, different trade. An irrigation contractor in Parker has the mainline in an open trench, valves and a controller in the garage, and a wire spool on the pickup that gets hit on Lincoln Avenue. A site crew stages culvert and road base for a driveway near Bailey and a September snow buries the base before the Bomag can get to it. Materials in transit, in storage, and on site, all before the owner has accepted anything. That’s the floater, subject to the limits and the policy language.

Two things to keep separate: the structure and your stuff. Builder’s risk insures a building under construction and everything going into it. The owner or the GC usually buys it, and the subs are supposed to be named. An installation floater insures one contractor’s materials and work until acceptance. A wall behind a finished house is floater territory. A pole barn you are excavating and pouring for is builder’s risk territory, and the question is whether your name is on it.

Then the seam with your other policies. The Yanmar mini skid steer setting the block is on contractor’s equipment. The neighbor’s fence the block rolled into is on general liability. The block itself, before the owner signs off, is here.

What it does not do

• Your own bad work. A wall that fails because the base wasn’t compacted is not a covered loss. That’s your warranty. What is covered under most forms: damage a covered cause (wind, hail, fire, theft, a vehicle) does to the work, and on some forms the resulting damage after a workmanship failure, with the defective part excluded.
• Your machines. Excluded. Contractor’s equipment covers them.
• The customer’s existing property. A skid steer through the garage door is a GL claim, not a floater claim.
• Earth movement and flood. Excluded or sublimited on many forms. On a hillside wall in decomposed granite above 9,000 ft or a lot in a mapped floodplain, ask for the endorsement and expect to pay for it.
• After acceptance. Once the owner accepts the work, the floater is done. Damage the work does later is completed operations on your GL. Damage to the work itself is on you.
• Mysterious disappearance. Some forms pay for theft only with evidence of theft. A fenced site and a delivery log turn a maybe into a claim.

Who needs it

Anyone who leaves materials on someone else’s lot overnight. Under our landscaping hub that’s hardscape, irrigation, and anyone installing trees at a price that would hurt to replace. Under excavation it’s utility and site crews carrying pipe, structures, and aggregate the contract calls theirs until installed. Under snow removal the answer is usually no, unless you are installing snow fence or a salt shed. Whoever owns the materials at the moment they are lost needs the policy. The risk-of-loss clause names that person. Read it before you deliver.

How it’s rated

No premium figures here. What moves the number:

1. Per-job limit. Sized to your largest materials package on site at once, not your annual total.
2. Annual receipts or project value. The base for a floater is usually your installed-materials volume for the year.
3. Theft controls. Fenced sites, locked conex boxes, cameras, and whether materials go home at night.
4. Territory. Front Range hail, mountain lots a mile from the county road, wildland-urban interface work.
5. Transit and storage. Whether the form covers materials on your trailer and in a rented yard, and at what limit.
6. Deductible and form. Named-perils forms are cheaper than special-form (all-risk) coverage and pay less often.

Colorado notes

Hail is the Front Range peril. Summer afternoon cells along the I-25 corridor do more damage to staged materials than theft does. Pavers survive hail. Sod, plants, a controller in a cardboard box, and an open trench in expansive clay do not. Ask whether the form has a separate hail deductible.

Winter shuts projects down mid-course. Mountain towns such as Alma may restrict cold-season excavation and utility taps; confirm the current cutoff with the town before scheduling. (Town of Alma Municipal Code (Ch. 13 Municipal Utilities, Ch. 18 Building Regulations)) [VERIFY] A wall left at course four from October to May is exposed to freeze-thaw, snow load, and theft for the whole gap. Confirm the floater covers a stalled project and whether the term needs an extension.

Fire in the WUI. A stockpile on a lot above Bailey or Conifer sits in the same wildfire exposure as the cabin next to it. Most forms cover fire. Some carriers restrict new floaters during a red-flag period, and that’s an unknown we can’t control.

Mountain lots are remote. Theft off a lot a mile from the nearest neighbor doesn’t leave much evidence. The forced-entry question in the FAQs matters more on a Park County lot than it does in Aurora.

Contract language you’ll see

• “Contractor bears risk of loss until substantial completion.” The clause that makes this policy necessary. Your materials, your work, your problem until the owner signs.
• “Builder’s risk to be provided by Owner. Contractor shall be named as an insured.” Get the certificate. If you can’t get it, buy the floater anyway.
• “Waiver of subrogation under the builder’s risk in favor of all subcontractors.” Common in GC contracts. It means the owner’s carrier won’t chase you after paying a loss on the structure.
• “Materials stored off site are covered only with Owner’s written consent.” Watch this one when you stage in a rented yard.
• “Installation floater, per-project limit not less than the contract sum.” Occasionally on public and commercial work. The per-job limit on your annual floater has to clear it.

Where to go from here

If you already carry contractor’s equipment coverage, send the dec page for a policy review and we’ll tell you whether there’s any materials coverage on it, and at what limit. Usually it’s a small incidental limit that wouldn’t cover one pallet. Starting fresh? Get Insured lists what to have ready, including your biggest recent materials invoice, because that’s the number that sizes the floater.

Serving businesses located in Colorado. Coverage is determined by the policy language and the carrier.

Terms on this page: builders risk, installation floater, inland marine, course of construction, soft costs, transit coverage, temporary storage, theft from jobsite, faulty workmanship exclusion, risk of loss. Full glossary.