Crane and Rigging Insurance: Liability, Programs, Costs & More
September 2, 2020
This report looks at Crane and Rigging Insurance Programs. They represent a broad spectrum of unique coverage solutions for the crane and rigging industry, which is a specialty subset of construction insurance. The guide provides details to inform readers beyond crane and rigging insurance basics.
According to the research firm, Global Market Insights, the North America crane market is expected to grow at a CAGR of over 6% by 2025 and is witnessing a high equipment demand due to the expansion of utility and infrastructure sectors. A report by MarketsandMarkets.com finds mobile models in the crane market had a revenue share of over 70% in 2018 and are gaining a high demand across various applications due to technical & safety features offered in new machines.
There are two broad categories of cranes, which are tower cranes erected on-site and mobile cranes. Mobile cranes are hydraulic-powered, cable-controlled lifts that use telescopic booms mounted on truck-type carriers or self-propelled crawler-track models.
What Is Crane and Rigging Insurance?
Crane and Rigging insurance represent a collection of policies designed to cover risks to companies who own, rent, operate, set up, and move cranes. Crane insurance and Crane Rental Insurance are used to describe the multiple coverages necessary to protect crane operations.
Some specific types of crane insurance and heavy equipment insurance include:
● Mobile & Tower Crane Operator Insurance
● Boom Truck Operator
● Service Truck Crane Operations
● Crane Inspector & Lift Director
● Concrete Pump Truck Operators
● Heavy Haul Trucking Operations
Specialized Transportation Operations
Rigging insurance is also known as Riggers Liability insurance. It is liability insurance to protect against losses to the property and equipment of others when on the hook of a crane.
Who Needs Crane and Rigging Insurance?
A typical insurance prospect is a rigging company whose business model is to provide cranes and operators for hire. Other candidates include Master Riggers as well as licensed operators. Additionally, there are rental-only companies that lease their cranes without operators.
Master Riggers are licensed professionals required to know how to stay in compliance with existing rigging standards. They are responsible for rigging methods, installation, maintenance, repair, and use of rigging hardware and equipment. They also guide on reading scaffold design drawings, verifying the fitness of the rigging crew, and professionally training workers on related hazards. Master Riggers are trained to identify and respond to emergency situations, climber, and tower crane assembly, jumping, and disassembly, critical picks, suspended scaffolds, fall protection, and more.
General Liability, also called Commercial General Liability (CGL), covers bodily injury and property damage claims arising out of business operations. For instance, if a building is damaged or a person is accidentally hurt due to operation of a crane, general liability covers the losses. Examples of coverages, limits, and endorsements included in a CGL are:
● $2,000,000 general aggregate
● $1,000,000 per occurrence
● $2,000,000 products and completed operations
● $1,000,000 personal and advertising
● Rigger Liability including Loss of Use and Over-the-Road coverage
● Short term pollution included in the limits up to $1 million per occurrence
● Over-the-Road liability coverage for truck-mounted cranes including state-required minimum financial responsibility loss
Employee Benefits of $1 million
Crane Physical Damage Coverage is necessary to cover the value of the crane. Due to their high cost, cranes and heavy machinery represent potential catastrophic exposures. As such, cranes must be insured against total loss or severe damage. Those who either own or lease cranes need insurance to cover damage to the crane itself. It is typical to add this type of coverage to an Inland Marine policy as an Equipment Floater.
Riggers are hired to lift valuable and expensive equipment such as generators, HVAC, and telecom apparatus. Riggers are liable for damages that occur during a lift. Using a crane to place heavy air conditioning units by crane is an example of a conventional use. Riggers Liability is specific and should not be confused with the general liability coverage of a crane operator, as mentioned above.
Quite often, Riggers Liability is part of an Inland Marine policy. Inland Marine policies cover transit or cargo protection in addition to a rigging liability policy. Alternatively, riggers liability is sometimes written as an endorsement to a general liability policy.
Crane and rigging operations carry inherent dangers. Workers' Compensation, also known as Workers' Comp insurance, is meant to replace wages and provide medical benefits to employees who suffer an on the job injury regardless of fault. The trade-off for the mandated coverages means employees who accept it relinquish their rights to sue their employer for negligence. All states, except Texas, have laws that require Workers' Compensation. Each state has requirements and penalties unique to it. In Texas, Workers' Compensation insurance is optional for employers.
Inland Marine, sometimes referred to as a cargo policy, protects a customer's goods while in transit. Warehouse liability can also be provided on this policy to cover goods in storage. As stated above, an Equipment Floater is a common addition to an Inland Marine policy. It will cover equipment damage, including crane rentals. Rigging liability is issued to crane operators to protect goods on the hook, and in transit.
There are many varieties of surety bonds. Construction operations call for surety bonds known as a contract bond. This specific type of surety bond guarantees contractors will complete construction projects to specifications and make required payments to subcontractors and suppliers. Project owners, whether government or private sector ventures require contractors, including crane and rigging businesses, to obtain surety bonds as part of their contract.
Excess Liability, also known as an Umbrella Policy, is advised, and often required for proper crane and rigging liability coverage on most projects. A typical general liability policy has a $1 million limit. Verdicts from lawsuits today can easily exceed the limit. Excess Liability policies provide additional coverage over the limits of a general liability policy. Excess Liability can also extend to provide extra coverage over the limits of a commercial auto liability policy.
Auto Liability is needed to cover a crane when it drives on public roads. It applies in the same way as coverage for driving a truck or passenger vehicle. Cranes can sometimes be added to the auto policy. Comprehensive insurance is necessary for transporting expensive heavy equipment. A motor vehicle law endorsement provides PIP, UM, and Med Pay coverages to mobile equipment. Coverages for hired and non-owned liability and hired car physical damage coverages are available options to consider.
Additional Crane and Rigging Coverage and Endorsements
Crane and rigging risk management solutions, depending on circumstances, may require additional coverages and endorsements, such as with these examples:
● Concrete and Concrete Pumping
● Motor Truck Cargo
● Boom Coverage
● Upset Coverage
● Aerial Lift Platform Dealers
● Foundation (Pile Drive/Drill Shaft)
● Select Demolition Operators
● Specialized/Heavy Haul
● Steel Erection
● Structural Movers
● Equipment dealers
Oversized/ overweight hauling - typically heavy machinery
Crane and Rigging Insurance Costs
It is not realistic to provide reliable data on the average cost for crane insurance. That's because rates can and do vary around the U.S., with higher rates seen in metropolitan areas. As always, the insured's professional experience, loss history, previous performance, financial stability, and other factors go into determining the overall costs of crane and rigging insurance programs. One can, however, estimate a rate between 1% and 3% of a crane's value to cover it for physical damage. As an example, using a 2% rate to insure a crane for physical damage with a value of $1 million, would cost $20,000.
Covid-19 Pandemic Impact on the Mobile Crane Market
The following quote is from Grandview Research on the effects of the pandemic on the construction industry:
The global construction industry, once thriving with increased investments, has been severely affected by the suspension of the construction activities in the wake of the ongoing pandemic. The shortage of laborers, coupled with potential supply chain bottlenecks of materials and equipment, is expected to cause project delays in the ongoing funded projects. It may lead to reduced spending in the upcoming projects. Uncertainty around the actual duration of the prevailing lockdown makes it hard to anticipate how a recovery in the construction industry will unfold. On similar lines, the HVAC industry has been adversely affected by the COVID-19 outbreak due to the shutting down of several component manufacturing facilities across China, European countries, Japan, and the U.S. This has consequently led to a significant slowdown in the production of HVAC equipment. Lockdowns imposed by the governments in the wake of the Covid-19 outbreak has not only affected manufacturing but also pegged back the consumer demand for HVAC equipment. The report will account for Covid19 as a key market contributor.
Best Crane and Rigging Insurance Programs
When seeking the best crane insurance program, look for a broker with a crane insurance underwriting specialist on staff. You'll want to utilize their knowledge of crane specific risk solutions. In the Program Business market directory, agents will find a listing for Worldwide Facilities, LLC (WWF). It is an independent, national wholesale insurance broker, managing general agency and program manager, established in 1970. Worldwide Facilities provides quality products and services to clients in need of specialized insurance coverage to address the unique exposures faced by the owners, operators, and personnel in the crane and rigging construction business.