Floater policy

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Floater policy
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Floater policy is a type of insurance policy, connected to two different fields: property and health insurance. In the first one it's usually called floaters, because it covers valuables and tools of everyday use, be it personal or connected with work. Very often used by general contractors and other companies that operate through a lot of equipment, from small, through construction machines, up to mobile offices.


"Floater policies provide all-risk protection for accident ant theft losses to movable property regardless of where the loss occurrs."[1]. As mentioned before, Floaters are what usually applies to pieces of insurance that, by their design, cover valuables, tools and other items. Those policies limits are much lower than usual homeowner's insurance policy, which can be very strict in terms of theft or damage. Accidental damage or theft loss protection may apply to movable property, regardless where did the accident or loss occur. Few examples of movable property, that may be covered by floaters are[2]:

  • Laptops
  • Cameras
  • Sport equipment
  • DVD players
  • Wearable accessories

Very often car dealers include partial floater policy, but it mostly applies to devices installed or mounted into the vehicle, that doesn't come out without using force and special equipment[3].

There are cases where insurances can't cover movable property, like in the case of business usage. For example, photographer's cameras and tools, DJ's mixer and equipment and similar items wouldn't be covered by normal insurance. In that situation floaters come to help, allowing a person to insure specific items.

Floater policy in medical field

This type of policy functions in a form of a sum of money, that is insured for the whole family. The covered amount or the whole insured sum, might be used for the insured person or for the members of his family. This points to the fact, that every family individual can request the policy sum during its period. From technical point of view, family is viewed as a whole, single unit, so it doesn't matter who claims the insurance[4].

One of the most visible differences between floater policy and usual health insurance policy, is the premium being charged. It's much lower in floater policy. Due to this aspect, many families tend to prefer this kind of policy over traditional health insurances.

Floater policy in general contracting

Floater policy is one of the most important things a contractor have to always remember about. From and into the construction site, there is always some ongoing transport, be it materials, required machines or tools and many other things. Floater policy allows a contractor to insure all the items for damage and more importantly, theft. Many machines and equipment tools are left in the open in the general area of construction site, often being potentially an easy target for thieves.

There is no set premium rate for floater policy focused on equipment. Insurance companies calculate those for each of the construction companies individually, using many variables like their reputation or past loss experience.

Insurance for equipment can be obtained in two ways:[5]

  • On a named-peril - the policy covers for equipment losses, which have to be listed by name in the document. All unlisted equipment is ignored.
  • On all-risk basis - the policy covers all equipment losses, besides those specifically listed in the document. Usually those are cases of equipment being lost by loaning to others, overload or because of wrong maintenance.

There are two forms of floater policy for contractors:[6]

  • On a schedule - every single covered item have to be listed in the policy with its specified value, which have to be kept up to date at all times. This becomes troublesome for companies with large amounts of equipment.
  • On blanket coverage basis - contractor usually lists every item and its value at the start and end of the policy period.


  1. Garman E.T., Forgue R., 2017, ch. 10, p. 323
  2. Garman E.T., Forgue R., 2017, ch. 10, p. 323
  3. Garman E.T., Forgue R., 2017, ch. 10, p. 323
  4. Subhash C., 2015, p. 828
  5. Clough R.H., Sears G.A., Sears S.K., Segner R.O., Rounds J.L., 2014, p. 226
  6. Clough R.H., Sears G.A., Sears S.K., Segner R.O., Rounds J.L., 2014, p. 226


Author: Jakub Urban