Forklifts are expensive pieces of equipment, and many business owners assume they are automatically covered the same way as desks, computers, shelving, or other business property.
That can be a mistake.
In many cases, a forklift should be specifically scheduled on an Inland Marine policy instead of being treated only as Business Personal Property, often called BPP, on a standard business insurance policy.
What Is Business Personal Property?
Business Personal Property generally covers things your business owns and keeps at its location, such as:
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Furniture
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Computers
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Office equipment
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Inventory
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Shelving
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Tools
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Supplies
Think of BPP as coverage for property that usually stays at your business location.
A forklift is different because it is mobile equipment. It moves around the property, may operate outside the building, and in some cases may be transported to another location.
That is why Inland Marine coverage may be a better fit.
What Is Inland Marine Insurance?
Despite the name, Inland Marine insurance usually has nothing to do with boats.
It is designed to insure certain types of equipment and property that move around or may be used away from one fixed location.
A forklift can often be specifically listed, or “scheduled,” on an Inland Marine policy.
For example, the policy may identify:
Forklift: Toyota Model 8FGCU25
Value: $35,000
That makes it much clearer exactly what equipment is being insured and for how much.
Why Is That Important?
Imagine your business owns a $40,000 forklift.
If it is only included in a large Business Personal Property limit, there may be questions after a loss about:
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Whether the forklift qualifies as covered property
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Whether coverage applies outside the building
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Whether it was being transported
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What deductible applies
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Whether the policy has special limitations for mobile equipment
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Whether the BPP limit is high enough to cover both the forklift and everything else
When the forklift is specifically scheduled on an Inland Marine policy, there is usually much less uncertainty about the fact that the equipment was intended to be insured.
Forklifts Can Leave the Building
This is one of the biggest reasons to review how a forklift is insured.
A forklift may be used:
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In a parking lot
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In a loading area
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In a warehouse yard
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At another job location
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At a customer’s property
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While being transported
A standard property policy is generally designed around property at the insured location.
Inland Marine coverage is designed specifically for property that may move.
What Happens If the Forklift Is Stolen?
Forklifts can also be stolen.
If the forklift is separately scheduled, the insurance company has a clear description and insured value for that piece of equipment.
That can make the claims process easier than trying to determine whether the loss fits within a general Business Personal Property limit.
What About Damage to the Forklift?
A forklift can be damaged by many things, including:
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Fire
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Theft
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Vandalism
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Collision
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Falling objects
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Loading or unloading accidents
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Transportation accidents
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Certain other covered causes of loss
The exact protection depends on the policy form and endorsements, so business owners should never assume every type of damage is automatically covered.
What About Liability?
Inland Marine coverage generally protects the forklift itself.
It does not automatically mean you have liability coverage for injuries or property damage caused while operating the forklift.
For example, if an employee accidentally hits a customer, another vehicle, or a building with the forklift, that may involve General Liability or another form of liability coverage.
That is why the entire insurance program should be reviewed, not just the forklift.
Why Scheduling the Forklift Can Be Better
Scheduling a forklift on an Inland Marine policy can help:
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Clearly identify the equipment being insured
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Establish an agreed insurance value or limit
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Provide coverage designed for mobile equipment
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Reduce confusion about whether the forklift falls within BPP
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Protect equipment when it moves away from one fixed location
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Keep an expensive forklift from using up a large portion of the Business Personal Property limit
A Simple Example
Let’s say a business has:
$100,000 of Business Personal Property
and owns:
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$50,000 of inventory
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$30,000 of equipment
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$40,000 forklift
The total value is actually $120,000.
If there is a major loss, the business may discover that its $100,000 BPP limit is not enough.
Instead, the business could insure its normal business property under the BPP limit and separately schedule the $40,000 forklift on an Inland Marine policy.
This can make the insurance program much clearer.
The Bottom Line
A forklift is not the same as a desk, computer, or shelf.
It is expensive mobile equipment.
For that reason, business owners should strongly consider specifically scheduling forklifts on an Inland Marine policy rather than simply assuming they are adequately protected under Business Personal Property coverage.
At Insurance Incorporated, we review business equipment and help our clients determine how it should be insured so there are fewer surprises when a claim happens.
If your business owns forklifts, pallet jacks, construction equipment, mobile machinery, or other expensive equipment, contact Insurance Incorporated for an insurance review.
Insurance Incorporated
877-898-9333
www.insuranceinc.com
Coverage varies by insurance company and policy. Always review the actual policy terms, conditions, exclusions, deductibles, and endorsements.
