Installation floater insurance for HVAC equipment

What an HVAC installation floater usually covers

How floater claims show up on HVAC jobs

These examples are made up to show how the coverage is meant to work. Whether a real loss is paid depends on the policy wording and the facts.

Example scenario: two heat pumps damaged in transit

A shop picks up two 3-ton heat pumps and matching air handlers for a duplex change-out. On the highway, a car cuts in, the box truck brakes hard and the load shifts. Both outdoor coils fold against the bulkhead. The distributor won't take them back. A floater with transit coverage is the policy built for this, up to its transit limit and after the deductible.

Example scenario: ductless heads stolen from a rented storage unit

Facing long lead times, a contractor orders early for a ten-suite office build-out. Twelve ductless heads, four outdoor units and the line set coils wait in a storage unit the shop rents across town. One night someone cuts the lock and empties it. If the floater extends to temporary off-site storage and the lock met its theft conditions, this is a floater claim. If storage isn't on the policy, it may not be.

Example scenario: an air handler dropped on the basement stairs

Two techs walk a new air handler down a narrow set of basement stairs on a dolly. A strap slips, the unit slides the last six steps, and the cabinet and coil are crushed. General liability usually won't treat the unit as someone else's damaged property, because it's the very thing being installed. An installation floater may pay to replace it.

Limits, theft conditions and price

Floater limits usually come in a few parts:

• Per job or per location. The most the policy pays at one site. Size it to the equipment value on your biggest job, not your average one.
• In transit. The most it pays for property on one vehicle. A truck carrying a full commercial order can hold more value than a whole residential job.
• Annual aggregate. A yearly cap that some forms add on top of the per-job limit.
• Storage. If you stage equipment at your shop or a rented yard, confirm the policy reaches that location and how much it pays there.

Theft rules can matter as much as the limit. Copper has been a target for years: in NICB's count of insurance claims for metal theft from 2014 through 2016, 98 percent involved copper. Ask how your floater handles theft from an open site, and whether it expects fencing, a locked enclosure or a cage over each condenser.

What you pay depends on your payroll by class code, your annual revenue, your mix of installation and service work, residential versus commercial jobs, the vans you run, your claims history and the limits you pick. Our HVAC insurance cost guide lists published ranges for the main policies.

Which HVAC contractors need a floater most

Any shop that buys equipment before sign-off carries the risk in between, especially these four:

• Residential replacement shops. A change-out on an existing home almost never comes with builder's risk, and a matched heat pump system is a large purchase to lose. See residential HVAC contractor insurance.
• Commercial mechanical subcontractors. Even with builder's risk on the project, subcontractor property or off-site storage may sit outside it. See commercial HVAC insurance.
• Refrigeration contractors. Walk-in panels, condensing units and evaporators often arrive in pieces and wait on site before assembly. See refrigeration contractor insurance.
• Independent techs who buy the unit. If you purchase the equipment yourself, a loss before the customer accepts it can land on you. See insurance for HVAC technicians.

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Installation floater requirements by state

State licensing boards don't usually tell HVAC contractors to carry a floater. The license rules we've reviewed set liability minimums, comp proof and bonds, and none of those protect equipment you haven't installed yet:

• Florida sets liability floors for air conditioning and mechanical licensees: $100,000 for injuries to the public and $25,000 for damage to others' property. Neither touches your own inventory. See Florida HVAC contractor insurance.
• New Jersey pairs a $500,000 general liability certificate with a $3,000 surety bond for master HVACR contractors. See New Jersey HVAC contractor insurance.
• Colorado has no state HVAC license, but the Pikes Peak Regional Building Department wants a $1 million / $2 million general liability certificate from mechanical contractors. See Colorado HVAC contractor insurance.
• Pennsylvania leaves licensing to cities; Pittsburgh's mechanical trade license asks for the same $1 million / $2 million liability limits plus workers' comp. See Pennsylvania HVAC contractor insurance.

So the push for a floater comes from your contracts, your lender or your own balance sheet. Rules change, so confirm current license requirements with your board or city. Our state pages cover each of the 28 states where we're licensed.