On any given day, for any given project, you may be thinking about the items you need and how many are available. The size, scope, and volume of work performed help determine the quantity of inventory a contractor needs. Residential contractors may keep a supply of lumber, nails, screws, joist hangers, and Tyvek. Commercial contractors may keep a similar supply and add steel studs, flooring, cabinetry, bathroom accessories, acoustical ceiling panels, fire extinguishers, hardware, and specialty fasteners to name a few. Different contractors carry different inventory, and the overall value of that inventory can become quite high over time.
Tracking inventory and knowing how much to keep on hand can be a balancing act. With inventory scattered in many different places, including trucks, trailers, job sites, employees’ homes, and the shop, it can sometimes be difficult to track. Inventory mistakes could lead to overstock of supplies or running out of an item at a critical time.
Today, there are several construction inventory management systems to help contractors manage their inventory in real time. These products may:
It is important that contractors understand the insurance coverage for their inventory. For instance, property at their office, shop, warehouse etc.—not on the job site—could be covered as business personal property if owned by them. Materials or items not owned by the contractor could be covered as property of others.
For property at job sites or in transit, coverage could depend on whether the contractor needs to cover the entire job site, project, or building. If the contractor needs to cover the job site, they may need to look at a builders' risk policy, which can cover the building itself for new structures or an addition but not the pre-existing structure. Builders' risk policies can also cover materials, equipment, and supplies in transit or at a temporary location. Temporary structures, such as job-site office trailers and their contents, could be included in this coverage as well.
A contractor may need to purchase an installation floater, which can cover materials, supplies, equipment, machinery, and fixtures that are owned by the contractor or those for which they are legally liable and are to be installed. This coverage may apply at a job site, in transit, or at a temporary storage location.
Builders' risk policies are usually purchased by the general contractor or the property owner. Installation floaters are typically carried by general contractors and/or subcontractors. Many contractors have exposure to this, but some certainly more than others. There may be specific policy language that can play into these coverages that your agent can explain. Remember, be sure to discuss your company’s operations and job-site exposures with your licensed agent to determine your insurance needs are covered.
At Acuity, we continue to tailor coverages to meet the needs of our contractor customers, including a specialty coverage called Property in the Course of Construction that basically combines a builders' risk and installation floater into one unique coverage. This is just another reason why over 50,000 contractors trust Acuity as their insurance carrier.