Does inland marine insurance cover damages during installation?

Complete Guide to Installation Damage Coverage in Inland Marine Insurance

Why This Question Matters for Colorado and Utah Residents

Damages during the installation of expensive equipment or materials are a major risk for businesses in Colorado and Utah, especially in sectors like construction, tech, and agriculture. With local weather extremes and frequent transportation needs, understanding installation coverage is essential:

• Severe Weather Risks: Hail and flooding cause 68% of inland marine claims in Northern Colorado, averaging $28,000 per loss. The 2024 Weld County hailstorm alone caused $3.4M in damages to equipment in transit and onsite.
• Economic Impact: Equipment downtime averages a loss of $18,000 per day in business interruption. Many regional businesses have closed after major uninsured losses.
• Regulatory Requirements: Colorado law now requires carriers to offer optional weather and transit extensions—crucial for successful claims during installation projects.

What Most People Get Wrong

Many business owners believe their general property or contractor’s policy automatically covers damages during installation. In reality, only an inland marine policy with an installation floater extends to materials and equipment while in transit, in storage, and throughout the installation process.

Another misconception is that all installation floaters are created equal. Coverage often excludes certain weather events, or only covers property at specific locations—not while being moved or fixed at a client site.

The Complete Picture

Inland marine installation floaters are designed to protect equipment and materials from the moment they leave your warehouse until they're permanently installed and accepted by the client. Typical policies will cover physical loss or damage from perils such as theft, collision, fire, hail, and accidental breakage, including key risks like wind and flooding when properly endorsed. Coverage usually includes transit, temporary storage, and the entire installation process.

However, exclusions and limits are common—standard policies may not automatically cover snowmelt flooding (a growing threat in mountain-adjacent areas) or may settle claims based on depreciated value (actual cash value) rather than full replacement cost. Premiums generally range from 0.5%–1.5% of value for construction equipment, but endorsements for specific risks (hail, expedited replacement, business interruption) are highly recommended based on Colorado and Utah’s exposure profile. Always review your contract and work with a local specialist to ensure your policy matches your project risks.

Making the Right Decision for Colorado and Utah Residents

Question 1: Does my installation floater specifically name all regional weather perils?

With weather-related claims comprising over two-thirds of inland marine payouts in the Rockies, it's crucial to:

• Ensure explicit coverage for hail, flood, and wind—especially if equipment is stored or installed outdoors.
• Request endorsements for snowmelt flooding and business interruption if your projects are time-sensitive or near mountains.

Question 2: Am I covered door-to-door, including storage and customer site?

Many claims are denied because coverage only applies at certain locations. Ask your agent:

• Does coverage begin when items leave your premises and extend through transit, temporary storage, and final installation?
• Are there specific geographic, storage, or time restrictions that could limit a potential claim?

Question 3: Is my equipment valued for full replacement or just book value?

Installation projects often involve high-value, specialized materials. Inquire about:

• Upgrading to replacement cost (not depreciated value).
• Rental reimbursement or fast-track repairs to minimize costly downtime (remember: average loss of $18,000/day).