WHAT IS '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 insure equipment it owns that it uses at various sites. 

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 stored at a specific location. The floater provides specific assurance that the insurance provider would cover any claims resulting from loss of those assets. Companies may pay an additional premium to add such a rider to a commercial insurance policy.

How Commercial Property Floaters are Used

Several different scenarios show how commercial property floaters add flexibility to how companies insure their assets.

Companies that regularly move equipment from site to site, such as construction contractors, need to make sure that wherever they store equipment, it is adequately insured. Weather, vandalism and other hazards create risk for expensive equipment such as cranes and bulldozers.

Some organizations don’t even have one consistent physical address. Carnivals and fairs, for example, 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 dangers may require a commercial property floater.

Many businesses that do operate from a central headquarters require commercial property floaters to protect equipment that’s routinely taken offsite. Sales executives 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 might be at any given time. For example, a laptop computer may be taken into an area known for higher-than-usual crime, or it may be stolen from an employee’s car or home in 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 scheduled property. They issue these floaters for assets specifically defined in the insurance contract. In other cases, commercial property floaters are written for unscheduled property, which means the insurance provider issues coverage for property not specifically itemized in the policy.

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