What is a Commercial Property Floater

A commercial property floater is a rider that is attached to a commercial insurance policy to protect property that a company doesn't store at a fixed location. For example, a construction company may want to guard equipment it owns that it uses at various sites. Companies may pay an additional premium to add such a rider to a commercial insurance policy.

BREAKING DOWN Commercial Property Floater

Commercial property floaters protect assets even though the insurance company underwriting the policy understands that various assets such as equipment may not be at a specific location. The floater assures that the insurance provider would cover any claims resulting from loss of those assets. 

The floater is a rider which can add to commercial property insurance coverage. This insurance essentially provides the same kind of protection as property insurance for consumers. However, businesses can usually deduct the cost of commercial property insurance premiums as expenses. The term floater refers to an addition to a current policy to make sure the insurance covers certain valuables. People buy these add-on policies to provide coverage for property that insurance may not adequately cover otherwise.

Companies that regularly move equipment from site to site, such as construction contractors, need to make sure wherever they have the equipment, it has adequate insurance. Weather, vandalism and other hazards create risk for expensive equipment such as cranes and bulldozers.

Some organizations frequently move for their work and do not have a consistent physical address. Carnivals and fairs are examples of such businesses. They regularly travel from one area to another throughout the country. While tornados may not be a risk in Oregon, they may be in Kansas. Flooding may be a danger in low-lying areas, while mudslides more of an issue in mountainous regions. Assuring protection against all such risks may require a commercial property floater.

Commercial Property Floaters Protect Employee Equipment Use

Many businesses which operate from a central headquarters require commercial property floaters to protect equipment routinely taken offsite. Sales executives and other employees may use company cars, phones, laptop computers, and other devices as they visit prospects and clients.

In these situations, insurance companies can’t know in advance where such devices may be at any given time. For example, an employee may carry a laptop into a higher-than-usual crime area. Thieves may steal equipment may from an employee’s car or home during a burglary. Although a commercial property floater may increase premiums paid, companies can protect their assets in multiple locations.

In some cases, insurance providers issue commercial property floaters for a scheduled property. They underwrite these floaters for assets defined explicitly in the insurance contract. In other cases, commercial property floaters are for unspecified or unscheduled property, which means the insurance provider issues coverage for property not itemized in the policy.