What the form is
The IH DS 68 Contractors Equipment Declarations is a crucial component of an Inland Marine policy designed to insure a contractor's mobile equipment. It is not a standalone coverage document but rather the personalized section of the policy that outlines the specific agreements between the insurer and the insured. It works in conjunction with the Contractors Equipment Coverage Form (IH 00 68), Common Policy Declarations (IL DS 00), Common Policy Conditions (IL 00 17), Commercial Inland Marine Declarations (CM DS 02), and Commercial Inland Marine Conditions (CM 00 01). This declarations page details the who, what, when, and how much of the coverage, including listing scheduled equipment with specific limits or providing a blanket limit for unscheduled equipment, applicable deductibles, and other policy specifics.
Classes of business it applies to
This form is essential for any business that owns, leases, or is otherwise responsible for mobile machinery and equipment. This primarily includes:
- Construction Contractors: General contractors, builders, and specialty contractors (e.g., excavation, paving, plumbing, electrical) who use equipment like bulldozers, cranes, excavators, loaders, and pavers.
- Landscaping Companies: Businesses using tractors, mowers, chippers, and other mobile landscaping equipment.
- Agricultural Operations: While farms often have specialized farm policies, larger or more specialized agricultural businesses with significant mobile equipment might use this form.
- Municipalities and Public Works Departments: Entities that own and operate a variety of service and maintenance equipment.
- Rental Equipment Businesses: While they have their own specialized coverages, they might be an insured on a contractor's policy if their equipment is in the contractor's care, custody, or control.
Real-world example: A general contractor building a new commercial complex would use the IH DS 68 to list their owned tower crane, multiple excavators, and a fleet of skid-steer loaders, specifying the coverage limit for each. They might also have a blanket limit for smaller tools and equipment.
Special considerations
- Policy Structure: It's vital to remember that the IH DS 68 is part of a larger policy package. Coverage interpretation requires reviewing all associated forms.
- Scheduled vs. Blanket Coverage: The form accommodates both scheduling high-value items with individual limits and providing a blanket limit for a group of smaller, less valuable items. The choice depends on the insured's inventory and risk management strategy. An alternative form, IH DS 59, is available for blanket-only coverage.
- Information Source: The IH DS 68 itself does not typically include spaces for the named insured's name, mailing address, policy period, or a description of the insured's business, as this information is usually found on the Common Policy Declarations (IL DS 00).
- Accuracy is Key: Incorrectly scheduled items, undervalued equipment, or inadequate blanket limits can lead to significant coverage gaps at the time of a loss.
- Transit and Off-Premises Coverage: The associated IH 00 68 coverage form generally provides coverage for equipment at job sites, unnamed locations, and while in transit, which this declarations page helps define the scope for.
Real-world example: If a contractor acquires a new, expensive backhoe mid-term, they must contact their agent to add it to the schedule on the IH DS 68 to ensure it's properly insured. Relying on a blanket limit might be insufficient if the new equipment's value exceeds the available blanket amount or if specific scheduling is preferred for high-value items.
Key information for agents and underwriters
- Risk Assessment: Underwriters will scrutinize the type of equipment, its age, condition, maintenance schedule, and how/where it's used (e.g., rugged terrain, underwater). The declarations provide the starting point for this assessment.
- Valuation: Determine if coverage is for Actual Cash Value (ACV) or Replacement Cost (RCV), which may be dictated by the coverage form or endorsements and reflected in the limits shown on the declarations.
- Setting Limits and Deductibles: Agents must guide insureds in selecting appropriate limits for scheduled equipment and blanket coverage, as well as suitable deductibles to manage premium costs and risk retention.
- Coverage Gaps: Be aware of common exclusions in the IH 00 68 (e.g., mechanical breakdown unless ensuing from a covered cause of loss, wear and tear, damage to tires unless part of a larger covered loss). These should be discussed with the insured.
- Endorsements: Consider necessary endorsements, such as for employee tools (e.g., IH 68 01), leased or rented equipment, or specific perils, and ensure these are properly referenced or their effects considered in the declarations.
- Loss History: A contractor's past loss experience with their equipment is a critical underwriting factor.
Real-world example: An underwriter reviewing an IH DS 68 for a demolition contractor might require higher deductibles or specific safety protocols due to the high-risk nature of the work and the potential for severe equipment damage. The agent should have collected detailed information on the equipment's protective measures during storage and transit.