What type of insurance specifically covers a general contractor's liability for damage to property while it's in their care, custody, or control?
Correct Answer
C) Installation floater coverage
Installation floater coverage (also called contractor's equipment floater) specifically covers property damage while materials or equipment are in the contractor's care, custody, or control. Standard general liability policies typically exclude this coverage.
Why This Is the Correct Answer
Installation floater coverage (also called contractor's equipment floater) is specifically designed to cover property damage while materials, equipment, or work in progress are in the contractor's care, custody, or control. This type of coverage fills a critical gap because standard general liability policies typically exclude coverage for property that contractors are working on or have temporary possession of. It's essential protection for contractors who handle valuable materials or equipment at job sites.
Why the Other Options Are Wrong
Option A: General liability insurance
General liability insurance specifically excludes coverage for property in the contractor's care, custody, or control. This is a standard exclusion in general liability policies, making it inadequate for this specific risk.
Option B: Completed operations coverage
Completed operations coverage protects against liability claims that arise after the contractor's work is finished and the contractor has left the job site. It does not cover property damage while materials are in the contractor's possession during the project.
Option D: Professional liability insurance
Professional liability insurance covers errors and omissions in professional services and advice, not physical damage to property in the contractor's possession. This type of coverage is more relevant for design professionals than general contractors handling materials.
Memory Technique
Think 'FLOAT' - Installation FLOATER coverage protects property that 'floats' between owner and contractor during construction projects.
Reference Hint
Florida Building Construction Standards - Chapter on Insurance Requirements and Risk Management
More Business & Finance Questions
A contractor's license expires on March 31st. If they submit a renewal application on April 15th, what additional requirement must be met under Florida regulations?
A general contractor purchases equipment worth $45,000 with a useful life of 9 years and no salvage value. Using straight-line depreciation, what is the annual depreciation expense?
In Florida, what is the minimum workers' compensation insurance coverage required for construction companies with employees?
What is the typical recommended coverage amount for general liability insurance for a small to medium-sized general contracting business?
A contractor estimates startup costs of $75,000 for equipment, $25,000 for initial inventory, $15,000 for insurance premiums, and $10,000 for working capital. They can finance 70% of the total. How much cash do they need?
People Also Study
Previous Question
Under OSHA standards, which workplace injuries must be recorded on Form 300?
Next Question
A contracting business operates as a sole proprietorship with annual revenues of $750,000 and expenses of $620,000. The owner takes a $60,000 salary. What amount is subject to self-employment tax?