Builder's Risk vs Installation Floater

Builder's risk and an installation floater both protect construction property, but they protect different interests. Here is who buys each one and how to keep them from leaving a gap.

What is the difference between builder's risk and an installation floater?

Builder's risk insures the whole structure under construction for the parties with an interest in it, such as the owner, developer, general contractor and lender. An installation floater, an inland marine coverage, insures a trade contractor's materials and installation work for its own scope, often until that work is accepted.

Put simply, builder's risk follows the building and an installation floater follows the trade. Builder's risk is usually bought by the owner or general contractor for the project's completed value, as explained in our guide to builder's risk insurance in Texas. A floater is usually bought by the subcontractor and sized to its own materials and work, on one job or across many.

What does inland marine insurance mean?

Inland marine insurance is property insurance for property that moves, sits on someone else's site or is part of a project in progress. The name grew out of ocean cargo coverage. In Texas, inland marine commonly includes installation floaters, contractor's equipment coverage and, depending on the form, builder's risk itself.

Contractor's equipment coverage insures the contractor's own tools and machinery, such as lifts, generators and welders. That equipment never becomes part of the building, so neither builder's risk nor a floater is usually designed to cover it. Definitions are in our commercial insurance glossary.

Builder's risk vs installation floater at a glance

The table below compares builder's risk and an installation floater on the points buyers ask about most. It shows common practice only. The policy form, its endorsements and the construction contract decide what applies, subject to the policy's terms, conditions and exclusions.

When does a subcontractor need a floater if the owner has builder's risk?

A subcontractor may need its own installation floater even when the owner or general contractor carries builder's risk. The project policy may not include the subcontractor as an insured, may carry a deductible the subcontract shifts to the trade, may exclude certain property, or may not reach materials before they arrive on site.

• Deductibles: many subcontracts make the trade responsible for losses to its own work up to the builder's risk deductible.
• Exclusions: a builder's risk form may exclude or limit theft of unattached materials or testing, depending on the form.
• Contract requirements: many subcontracts require the trade to insure its own work until acceptance. The contract and your attorney govern. See contractor insurance requirements in Texas.
• Uninsured scope: materials at the trade's shop, in its trucks or at a supplier may fall outside the project policy, and some service or tenant jobs have no builder's risk at all.

Timing matters too: a project policy starts when the insurer binds it, as covered under when builder's risk coverage starts. Our page on what builder's risk covers explains the parts of a project form worth asking the owner about.

When both apply, how do you avoid gaps or double coverage?

Builder's risk and an installation floater can both apply to the same installed work, creating overlap on some property and gaps on other property. The practical fix is to read the contract, the builder's risk policy and the floater together, then agree in writing which policy is expected to respond first to a loss on the trade's scope.

• Confirm whether the subcontractor is an insured on the builder's risk policy and whether subrogation is waived.
• Settle who pays the builder's risk deductible on a loss to the trade's work.
• Check the other insurance wording, which may make one policy excess over the other.
• Match end dates: builder's risk may end at occupancy while the trade still owes startup or commissioning work.

General contractors coordinating many trades can read builder's risk for general contractors. Damage a trade causes to other people's property is a liability question, explained in builder's risk vs general liability.

Which trades typically carry an installation floater?

Installation floaters are most common among trade contractors whose materials carry high value before they are installed and accepted. In those trades, a theft, fire, water or storm loss to equipment awaiting installation can be significant, so general contractors often require the floater in the subcontract.

• HVAC: rooftop units, air handlers and controls staged before startup.
• Electrical: switchgear, panels and copper wire, a common theft target.
• Plumbing: piping, fixtures, water heaters and pumps.
• Glazing: curtain wall and glass that can break before it is set.
• Roofing: membranes and panels stored on the deck, exposed to wind and hail.
• Solar: panels, inverters and racking stored on site.
• Equipment setting: generators, chillers and machinery being set in place.

North Texas hail and wind make roof-staged materials a recurring concern. 4J Insurance Brokerage reviews the floater, equipment coverage and contract requirements together. For the broader trade program, see contractors and construction insurance.

Frequently asked questions

Is an installation floater the same as builder's risk?

No. Builder's risk insures the whole structure under construction for the parties with an interest in it. An installation floater insures one trade contractor's materials and installation work for its own scope, and it is a form of inland marine insurance.

Does the owner's builder's risk policy cover my materials as a subcontractor?

It may, depending on whether the policy includes subcontractors as insureds and how it treats materials in transit and storage. Even then, the subcontract may make you responsible for the deductible. Have your attorney review the subcontract.

Does an installation floater cover my tools and equipment?

Usually not. Tools, lifts and machinery are usually insured under contractor's equipment coverage, a separate inland marine coverage, subject to that policy's terms, conditions and exclusions.

When does installation floater coverage end?

Depending on the policy, installation floater coverage often ends when the contractor's work is accepted, when its interest in the property ends, or when the policy expires. Testing and startup may need specific wording.

Can one installation floater cover all of my jobs?

Many installation floaters can be written on a blanket basis covering multiple jobs during the policy term, with per-job limits, while others cover a single project, subject to underwriting.

This page is general information, not a quote, a coverage opinion or legal advice. Coverage, eligibility and pricing depend on underwriting and on the terms, conditions and exclusions of the policy issued. Market appetite changes; examples reflect 4J's understanding as of September 2026. 4J Insurance Brokerage is a broker and does not underwrite risk or issue policies.