Tools and equipment insurance

Contractor's tools and equipment insurance covers small tools and equipment. It is sometimes called inland marine insurance, equipment floater insurance, tools and equipment insurance, or just tool insurance.

This policy offers ideal coverage for professionals who regularly work at different jobsites, such as landscapers, plumbers, and mobile mechanics.

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

Tools insurance covers many different types of tools, equipment, and cargo. This includes tools from hammers to saws, to laptops and lawn mowers. Items valued at over $2,500 often must be listed separately as scheduled items, which generally cost more to insure. Tools insurance does not cover general wear and tear.

Commercial property insurance and business owner's policy (BOP) typically covers items that are housed at the business address listed on the policy.

If you don't carry policies that protect property away from your primary location, you'll pay for losses out of pocket if cargo or equipment is stolen from a truck or if your company's storage unit is destroyed in a fire.

Tools insurance covers your business property wherever it goes, including at job sites, in transit, and stored off-site. It offers crucial financial protection for any business with valuable property outside its office. With this coverage, you can get back to work fast after theft or other losses.

Given the recent escalation of cargo theft, which costs over $200,000 per incident on average, this coverage is more important than ever.

A contractor’s tools and equipment policy covers equipment that moves from place to place, such as hand tools, power tools, and small machinery. Some insurance companies may require items to be relatively new and low-cost, while higher-value items may need to be listed separately on the policy.

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.

Tools and equipment insurance benefits a wide range of businesses that bring tools and equipment to job sites, including construction companies. In the construction field, this policy is often called contractor's tools and equipment insurance.

Both small business owners and independent contractors should consider carrying this coverage, including:

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.

Tools and equipment insurance and inland marine insurance are different names for the same type of coverage for business-owned portable items.

You can purchase unscheduled or miscellaneous coverage for equipment valued under $2,500 (or up to $5,000, depending on the insurer), such as lawn mowers, saws, and drills.

More expensive items, such as excavators, bulldozers, and backhoes, must be scheduled separately on the policy and cost more to insure.

Equipment breakdown coverage, sometimes referred to as boiler and machinery insurance, covers commercial equipment or machinery that suffers an unexpected failure.

If you have questions about which insurance plans you need, our licensed insurance agents can help you find the right policies.

Equipment floater insurance is another term for tools and equipment insurance, or inland marine insurance. The name "floater insurance" comes from the fact that your coverage isn't locked to a specific location, but travels wherever you go.

Installation floater insurance is another policy that covers building materials, supplies, and appliances at a jobsite before they are permanently installed.

There's also a similar auto insurance coverage called a mobile equipment endorsement, which extends your auto insurance to cover tractors, forklifts, and other mobile equipment driven on public roads.

Yes, independent contractors and sole proprietors still need contractor's tools and equipment coverage. Business owners who travel with valuable equipment or work off-site must carry this coverage to avoid expensive repairs or replacements.

For example, a pressure washing contractor would likely need insurance for the machines and accessories they bring to clients' homes and offices.

Homeowner's insurance won't cover your business personal property, and a standard commercial property insurance policy won't protect items stored or transported outside of your main business location. For this reason, tools insurance is invaluable for independent contractors and sole proprietors who have property that moves with them. 

Tools insurance covers most employee-owned tools if they get damaged, lost, or stolen during the course of work.

Examples of covered tools include pliers, hammers, wrenches, screwdrivers, measuring tools, shovels, rakes, impact drivers, pruners, garden forks, loppers, spades, trowels, and more.

Items worth over $2,500 generally need to be scheduled separately on the policy to be covered.

Tools insurance covers rented, leased, and borrowed items, such as a commercial sprayer that a painter rents for a project. Property in your care, custody, or control is generally not included in your general liability insurance, making additional coverage necessary.

You may want to get your own coverage, even if you work for an employer. Contractors and subcontractors who use their own equipment, or rent or borrow tools, often carry their own contractor's tools and equipment coverage to make sure they're fully protected.

Yes, business insurance is typically tax-deductible. The IRS allows tax deductions for ordinary and necessary business expenses, which include many commercial insurance types.

For example, a paving business that carries a business owner's policy can deduct that cost from its annual taxes. If the business also carries tools and equipment insurance for off-site paving jobs, it can deduct that policy cost as well.