Plug the Gaps in Coverage with these 4 Insurance Types

Article Last Updated 03/18/2026

Article Reviewed by a licensed insurance professional: Sam Meenasian (CA dept of insurance license #0F75955).

Estimated reading time: 5 minutes

Key Takeaways

Small business owners often overlook crucial types of insurance, which can lead to costly gaps in coverage.
Per-project aggregate ensures that each project has its own limit, protecting against large claims that could deplete total coverage.
Rented or leased equipment insurance covers equipment that businesses do not own, addressing liability for theft or damage.
An installation floater protects materials in transit or storage until they are installed, filling coverage gaps during that period.
Hired and non-owned auto liability covers vehicles borrowed for business use, even for employees’ personal vehicles used during work.

Running a small business or any business comes with risks. You know this, and you have general liability insurance. But, you’re not in the clear.

I’ve seen it time and time again. Business owners don’t know what they need or when they need it.

And when you miss out on coverage you need, you’ll pay more in the long run.

In my experience, there are four types of coverage that small business owners miss out on.

Per project aggregate
Rented or leased equipment
Installation floater
Hired and non-owned Auto liability.

These are common gap-fillers we often see for contractors and service businesses, but the right mix depends on your operations, contracts, vehicles, and state requirements.

Per-Project Aggregate

Your liability coverage would cap the total payout. That cap is an aggregate limit. You may think that limit is enough, but one huge mess-up can drain the whole amount.

That’s why per-project aggregate is a good option. A per-project aggregate endorsement could make your general aggregate apply separately to each project, so one large claim on Project A is less likely to erode the aggregate available for Project B (subject to your per‑occurrence limit and policy terms). So if you have a 2 million per job per project aggregate, that is much more appropriate than having 2 million to cover you the whole year. That’s especially true if you’re in a business where you have a bunch of different projects all happening at one time. Imagine trying to deal with two disastrous projects at once, with a total aggregate limit that only covers the damages from one of the projects? That’s a recipe for disaster.

Sorry to say, I know a small contractor who made this mistake. One claim on a remodeled drain is his entire aggregate limit. Then he had to fight another claim against him on a totally different policy. He was left to pick up those costs.

And if you’re a subcontractor, you may need this coverage to get more business. Many contractors won’t even consider subcontractors who don’t carry this kind of coverage.

So if you want a business that gets picked in bidding wars, get this coverage type.

Rented or Leased Equipment

Do you own all of the gear that you use on-site or in your business? Chances are you don’t. In fact, you may be running most of it, especially if you need large equipment that costs hundreds of thousands, if not millions of dollars.

Rented/Leased Equipment usually provides property coverage for theft or damage to equipment (including rented/leased equipment when scheduled or endorsed). Liability from accidents is typically addressed under general liability/commercial auto, depending on the loss.

Installation Floater

An installation floater is inland marine coverage for materials and equipment being installed and may include transit and temporary storage until items are installed and accepted/put to use depending on policy terms and contract responsibility, those materials may not be covered under your building/business property policy or the client’s policy while in transit or waiting for installation—an installation floater is designed to address that gap.

Contractors should carry this coverage to avoid the uninsured gray area. In this gray area, the uninstalled property may not be covered by the client’s policy.

Let’s look at an example. Imagine that you ordered custom marble countertops for a client’s renovation. The countertops are shipped from a warehouse, and of course, they won’t magically appear in your business. In the in-between stage, where the countertops are not installed, your normal property insurance won’t cover them. The client’s property policy won’t cover them yet either. So any losses could fall directly on you.

But not if you have an installation floater. If you have the installation floater, those countertops could be protected at every step, and there may be no costly gap in insurance coverage.

Hired & Non-Owned Auto Liability

This insurance type is one of the most overlooked I’ve seen. Imagine that you have an employee who makes a supply run.

Hired auto liability usually applies when the business rents, leases, or borrows vehicles for business use, often excluding vehicles borrowed from employees/partners or their household members (check your policy wording). HNOA is typically liability coverage (BI/PD + defense) for claims against the business.

And don’t think that this coverage type doesn’t apply to your business because you don’t do deliveries. In businesses like consulting or sales, employees often use their own vehicles to go to appointments. You’ll want coverage in these situations if they get into an accident and cause harm to others.