Contractor License Practice Exam

What type of policy covers equipment that is in transit, on the premises, or at the job site?

1. Liability Policy

2. Equipment Floater Policy

3. General Property Policy

4. Installation Floater Policy

The correct answer is: Equipment Floater Policy

An Equipment Floater Policy is designed specifically to cover the risks associated with equipment as it is moved or transported. This type of policy provides coverage for equipment that is temporarily located away from a fixed location, making it applicable to scenarios where equipment is in transit, on the premises, or actively being used at a job site. This policy is particularly beneficial for contractors and businesses that rely on expensive machinery or tools, as it protects against losses from theft, damage, or other perils while the equipment is not in a permanent location. By having this coverage, contractors can safeguard their investments and ensure they are protected from potential financial losses arising from incidents that may occur while equipment is on the move or in use at various locations. The other policy types, while they may offer some level of protection, do not specifically cater to the nuances of equipment in transit or at job sites. For instance, a Liability Policy primarily covers legal liabilities rather than physical loss of equipment, and a General Property Policy may not focus on the specialized needs of tools and machinery used in construction or contracting. An Installation Floater Policy covers goods that are being installed, but it also does not extend to equipment that is merely in transit or already on-site.