Tools and equipment insurance

A form of inland marine insurance, contractor's tools and equipment insurance provides coverage for small tools and equipment.

This policy is sometimes called equipment floater insurance, tools and equipment insurance, or just tool insurance. This policy offers ideal coverage for professionals who regularly work at different job sites, such as landscaping businesses.

It protects movable tools and equipment wherever you take them, and helps pay for the repair or replacement if they're lost, damaged, or stolen.

It's important to note that contractor's tools and equipment insurance does not cover general wear and tear.

A contractor’s tools and equipment policy covers equipment that moves from place to place, such as hand tools, power tools, and small machinery. This policy typically only covers items that are relatively new and inexpensive.

A covered loss under this policy includes a variety of items and incidents, including:

Commercial property coverage usually won't protect your tools in transit or any business equipment stored at a worksite or storage facility. You'll likely need additional coverage, as it is risky to continuously move items and store them off-site.

Contractor's tools and equipment insurance provides benefits for a wide range of businesses that bring tools and equipment to their job sites. Both small construction business owners and independent contractors should consider carrying this coverage, including:

If your employee's tools are stolen or vandalized at a client's property, contractor’s tools and equipment insurance covers its replacement or repair cost. 

For example, say an electrician's power tools are unintentionally damaged by the cleaning crew while left overnight at a client's office. This policy would cover the cost of replacing the broken tools.

Should your repair or service equipment be stolen or damaged while on site for a client, contractor's tools and equipment coverage would cover the cost of repairing or replacing the tools.

For example, if a computer repair tech has their repair tools and laptop stolen from the company vehicle, this policy would cover the cost of replacing the stolen items.

Installation professionals depend on this policy to protect their tools and equipment left at a client's home, office, or other property during a project.

For example, it could cover the cost of replacing a window and door installer or HVAC installer's adjustable wrench set stolen from their van. It also covers damaged and destroyed items, such as a flooring contractor's shipment that was stored outside at a client's property during a windstorm.

Contractor's tools and equipment insurance is ideal for businesses with small budgets, but it's important to remember that the policy doesn't cover every instance of property damage. It's also not designed for certain types of equipment.

Here are a few exclusions businesses commonly face:

You can purchase a tools and equipment policy as a standalone, or you may be able to include it as an add-on rider to a business owner's policy.

Speak with our licensed insurance agents who are available to answer your questions on insurance costs, coverage options, and picking the right types of policies for your insurance needs. Business owners may benefit from additional policies, such as business interruption insurance and general liability coverage, to protect against financial losses from common risks.

With TechInsurance, you can get quotes from top-rated insurance providers with one easy application.

Once you find the right types of coverage for your small business, you can easily download a certificate of insurance. You'll often receive your certificate the same day you purchase your insurance products.

With contractor’s tools and equipment insurance, you have the option of insuring your tools and equipment for their replacement value or their actual cash value.

Insuring for the replacement cost helps pay for the purchase of a brand-new item to replace any equipment that was lost or damaged at a worksite.

On the other hand, actual cash value refers to the item's current market value and factored depreciation from the number of years the item was used.

Because of this, a policy insured with actual cash value typically costs less.

Contractor's tools and equipment business insurance is designed for items valued at less than $10,000.

Meanwhile, specialized equipment or heavy machinery may require inland marine insurance. If you're looking at expensive heavy equipment, like a bulldozer, backhoe, or excavator, inland marine insurance is likely the appropriate policy.

If you only need coverage for smaller, less costly tools, such as lawnmowers, saws, or hand tools, then contractor's equipment insurance should be enough.

There's also equipment breakdown insurance, which is designed for machinery or equipment that suffers a mechanical failure at your business.