It is a fairly common misconception that all aspects of the construction industry can be lumped together under the umbrella of a single insurance model that suits all, and satisfies the insurance needs for all. In actuality, the specific needs of the crane and rigging industry call for a very specialized crane and rigging insurance package.
The most obvious need for this can be seen just by a review of the kind of equipment used – cranes and rigging equipment are extremely heavy machinery, which means that any kind of mishap on a job site can have catastrophic results for nearby workers. Because of the potential for disaster from lifting and moving heavy materials at a construction site, crane operator insurance is a must to assume the liability risk in case something goes wrong. Since this is also extremely expensive equipment, there is also a compelling need to protect the owner from devastating financial loss in the event of certain kinds of equipment damage.
Advantages of Specialized Crane & Rigging Insurance
The specialized needs of the crane and rigging industry really requires that there is crane insurance coverage and rigging insurance coverage right from the time of contract bidding, on through to the completion of all work agreed upon. Since there can literally be a potential claim triggered during all phases of the process between the start and end points of a contract, there needs to be adequate coverage for the full duration of that period.
Few insurance programs are designed specifically with the crane and rigging industry in mind, and that makes it doubly important that the right program is selected. When only general liability coverage is offered by a blanket construction insurance policy, it becomes much more likely that a far greater share of the risk is assumed by the contractor, and far less by the General Contractor or Insurance Company.
Sometimes even a crane and rigging insurance policy can be inadequate in its coverage, because of risk and liability language included in a contract by the company purchasing crane services. This is a great argument for having every contract reviewed carefully by a crane or rigger’s legal representative, to ensure that undue risk is not assumed by the crane contractor which would tend to negate or reduce any insurance coverage.
Specialized Coverage and Risk Management
Another way in which specialized crane and rigging insurance is advantageous to a contractor is when this very heavy equipment must be transported to a work site. Transportation to a work site is always needed, and things can certainly go wrong when very heavy equipment must be moved over a significant distance. Given the value of such equipment, over-the-road coverage becomes a necessity to avoid serious financial loss from any kind of in-transit accident. With generalized insurance coverage or zero insurance coverage for this transportation function, a contractor could quickly become financially crippled should anything go wrong.
Clearly, the ideal solution is to match a specialized crane and rigging policy to the risk management policies adopted by the crane operator so that the crane operator is not overburdened by risk that should more properly be assigned to the General Contractor. Along with minimized exposure to risk, coverage provided by a specialized crane and rigging policy should take into account other factors specific to the industry.
One of these special needs concerns the boom of a crane and any damage it might potentially cause. Boom overload clauses are sometimes added to a general equipment floater, thereby reducing operator exposure. Accidental pollution damage is a risk not always considered but certainly something that should be factored into specialized crane insurance.
If this very specialized equipment should become disabled for any length of time, that also gives rise to other kinds of very specific exposure, for instance the cost to repair or replace the equipment. A natural extension of this possibility is the loss of income for the crane or rigging operator – with the means of acquiring work contracts unavailable, an operator may have no other way of generating income, and must decline potential contracts. This can lead to a domino effect where other contractors are selected by the General Contractor, and an operator’s loss of business can be extended.
Having only generalized construction industry insurance can be almost the same as having no insurance at all for a crane or rigging operator. Only by having specialized industry insurance can an operator be adequately protected, and even then all work contracts must be carefully reviewed for any exclusionary language that might negate the coverage provided.
Make sure all your insurance needs are accounted for with the construction insurance experts at Allied Insurance Brokers. For over 30 years, the team at Allied has provided cost effective solutions to help their clients minimize risks and exposure to protect profits and build their bottom line. Help your business stay afloat and talk to one of our professional construction insurance brokers today!
*Allied does not deem this blog entry as a complete and thorough listing or overview of the above topic, and does not recommend it be primarily relied on. It only highlights some common issues and resolutions. For a thorough overview, please contact Allied’s Risk Engineering Division.