What Is an Equipment Floater? (And When Do You Actually Need One?)
Equipment floater is one of those insurance terms that gets used three different ways depending on who is talking. An agent will use it to mean one thing. A carrier underwriter will use it to mean another. A contractor reading their declarations page will read it as a third thing entirely.
This is the plain-English explainer. What an equipment floater actually is, when you need one, how it differs from the other inland marine coverages that sound similar, and the questions to ask your agent before you sign anything. If you would rather just have us look at your current program, call (801) 505-5500. Otherwise, here is what the term means and why it matters.
What Is an Equipment Floater?
An equipment floater is a property insurance policy form that covers movable business equipment. The word "floater" is industry slang for an inland marine policy form that follows the property wherever it goes - it "floats" with the equipment instead of being tied to a fixed location like a building.
The clean definition: an equipment floater covers physical damage to specific equipment items, listed individually on a schedule, against a broad set of perils, regardless of location. The schedule is the heart of the policy. Each piece of equipment is identified by make, model, serial number, and value. The policy pays the listed value (or the cost to replace it) if a covered loss occurs.
You will hear the term used loosely to mean any of the following:
- Contractors equipment floater - the most common usage. A scheduled inland marine policy covering a contractor's heavy equipment.
- Tools floater - blanket inland marine coverage for hand tools and power tools, typically without scheduling individual items.
- Installation floater - coverage for materials being installed at a project site until installation is complete.
- Equipment floater as a generic catchall - any inland marine policy on movable business equipment, scheduled or blanket.
The unifying concept across all four: property insurance that follows the equipment, not the building.
Equipment Floater vs. Tools Floater vs. Inland Marine vs. Contractors Equipment
These four terms cause more confusion than almost anything else in commercial insurance. The truth is they all refer to the same underlying policy form (ISO inland marine), configured for different equipment categories. Here is the clean breakdown.
| Term | What It Means | Typical Use |
|---|---|---|
| Inland Marine | The umbrella policy form. Property insurance for movable property. | The policy itself. Anything else on this list is a configuration of inland marine. |
| Contractors Equipment Insurance | Inland marine configured specifically for contractor equipment exposures. | What most carriers call the product when sold to contractors. |
| Equipment Floater | Scheduled inland marine policy with each high-value item listed. | Heavy equipment, high-value items, anything over $25,000 per piece. |
| Tools Floater | Blanket inland marine coverage for tools without individual scheduling. | Hand tools, power tools, smaller equipment under $25,000 per item. |
| Installation Floater | Inland marine coverage for materials being installed at a project until installation is complete. | HVAC, electrical, plumbing materials at active jobsites. |
Most contractor programs combine all of these into one inland marine policy: scheduled equipment floater for heavy equipment, blanket tools floater for hand and power tools, and installation floater for active jobsite materials. The combination gives complete coverage for property that leaves your shop.
What an Equipment Floater Covers
Equipment floaters are typically written on an open-peril basis, which means coverage applies to direct physical loss or damage from any cause that is not specifically excluded. The list of covered causes is broad:
- Theft (the #1 claim type)
- Vandalism and malicious damage
- Fire, lightning
- Wind, hail, hurricane, tornado
- Collision, overturn, upset
- Falling objects
- Equipment falling from a transport vehicle in transit
- Operator-induced damage (collision into another piece of equipment, structure, etc.)
- Weight of ice or snow
- Sinking or upset on jobsite
Standard exclusions include wear and tear, mechanical breakdown (separate equipment breakdown coverage), employee dishonesty (separate Crime coverage), and use outside the equipment's design intent (drag racing, prearranged stunting).
An equipment floater on an open-peril form is broader than most contractors expect. The narrowing happens when a contractor accepts a "named perils" form to save premium - that form only covers what is specifically listed. Always confirm you are on an open-peril form before binding.
When Do You Need an Equipment Floater?
You need an equipment floater (or its equivalent under a different name) any time you own or use valuable movable equipment in your business. The "do you need one" test boils down to two questions:
- Does the equipment leave your permanent business location? If yes, your commercial property policy does not cover it once it leaves.
- Is the equipment valuable enough that you cannot easily replace it from cash flow? If yes, the loss exposure is real.
If you answered yes to both, you need an equipment floater or contractors equipment policy. The threshold is lower than most contractors realize. A single skid steer, generator, or boom lift is enough to justify the coverage.
Industries where equipment floaters are standard:
- Construction contractors - all trades, all sizes
- Landscaping and tree services - mowers, chippers, stump grinders
- Farming and agricultural operations - tractors, combines, sprayers
- Industrial cleaning and remediation - portable extraction units, pressure washers, scaffolding
- Specialty rental operations - equipment rental yards insure their fleet on inland marine
- Surveying and engineering firms - high-value GPS, drones, survey equipment
- Photography and event production - cameras, lighting, audio equipment
Scheduled vs. Blanket Coverage
The biggest decision when setting up an equipment floater is whether to schedule items individually or write blanket coverage.
Scheduled Coverage
Each item is listed on the policy with a specific value. The carrier knows exactly what they are insuring. If a $200,000 excavator is totaled, the policy pays $200,000 (subject to deductible and replacement cost vs ACV terms).
Pros: guaranteed payout at the listed value. Higher items get full attention from underwriting and claims.
Cons: requires updating the schedule every time you add or sell equipment. New equipment purchased mid-policy is not covered until added.
When to use it: any item over $25,000. Most carriers require scheduling for high-value items anyway.
Blanket Coverage
The policy covers a category (like "all hand tools" or "all power tools") up to an aggregate limit, without listing individual items. If a $1,200 cordless drill gets stolen, the policy pays the value of the drill out of the blanket limit.
Pros: automatic coverage for newly-acquired equipment in the category. No schedule maintenance.
Cons: aggregate limit caps total recovery in any single loss. A theft of an entire tool truck might exceed the blanket limit on tools.
When to use it: hand tools, power tools, and smaller equipment under $25,000 per item.
Most contractor programs use both. Heavy equipment is scheduled. Small tools are blanket. The two coverages share a single inland marine policy.
How to Size Your Equipment Floater Limits
Two limits matter most: the per-item limit on scheduled equipment, and the aggregate blanket limit on tools.
Per-item limit on scheduled equipment: set at full replacement cost for each item. A $250,000 excavator should be scheduled at $250,000 with replacement cost coverage. Resist the temptation to under-insure high-value items to save premium - the savings are minimal and the gap at claim time is significant.
Blanket limit on tools: the floor is the value of your worst-case theft. If a thief breaks into the truck where your top-tier crew stores their tools, what is the dollar value? That is your blanket limit. Most contractors land between $25,000 and $100,000 on the blanket limit.
Sub-limits to verify in the policy form:
- Per-item sublimit on the blanket category. Some policies cap any single item at $5,000-$10,000 within the blanket. If you have a $20,000 piece of equipment that is not separately scheduled, the per-item sublimit might cap your recovery.
- Off-premises sublimit on tools at jobsites versus tools at the contractor yard. Some policies pay less when the loss occurs off-premises.
- Newly-acquired equipment sublimit for items added during the policy term. Typical limits are 25% of the schedule value or $50,000, whichever is less, for 30-60 days.
General liability, workers comp, commercial auto, equipment - we package the whole program for contractors. Apply in about 10 minutes and we will get to work.
What an Equipment Floater Costs
Premiums typically run between 1% and 3% of the total insured value per year. The same factors that affect inland marine and contractors equipment insurance pricing apply: equipment type, storage conditions, deductible, replacement cost vs. ACV, and loss history.
For a clean breakdown of cost factors, see Heavy Equipment Insurance: What It Costs to Insure Excavators, Skid Steers, and Mobile Equipment.
The Three Questions to Ask Your Agent Before Binding
If you are setting up an equipment floater for the first time, or reviewing an existing one at renewal, three questions get to the heart of whether the coverage is set up correctly.
- "Is my policy on an open-peril form or a named-peril form?" If named-peril, ask why and confirm the perils listed cover the realistic risks for your operation. Open-peril is the default for clean placement.
- "Are my high-value items scheduled with serial numbers and replacement cost values?" If the answer is "we have a blanket of $X" without specific items listed, you have a coverage gap on the big stuff.
- "What is my per-item sublimit on the blanket category, and what happens if I lose a single item over that amount?" If your blanket has a $10,000 per-item cap and you have $15,000 worth of cordless tools in one truck, your worst-case recovery is capped at $10,000. That gap needs scheduling or a higher per-item limit.
If your agent cannot answer all three within five minutes, you have an agent problem on top of a coverage problem.
Frequently Asked Questions
What is an equipment floater?
An equipment floater is a property insurance policy that covers movable business equipment, with each scheduled item listed individually by make, model, serial number, and value. It is a configuration of inland marine insurance. The policy "floats" with the equipment - coverage applies wherever the equipment is, not just at your business location.
What is the difference between an equipment floater and a tools floater?
Both are forms of inland marine insurance. An equipment floater covers heavy equipment with each item individually scheduled (excavators, skid steers, generators, lifts). A tools floater covers smaller hand tools and power tools on a blanket basis without scheduling individual items. Most contractor programs combine both into one inland marine policy.
What is the difference between an equipment floater and a contractors equipment policy?
They are essentially the same product. "Equipment floater" is industry slang for the scheduled portion of an inland marine policy. "Contractors equipment insurance" is what most carriers call the same coverage when marketed to contractors. The underlying policy form is identical.
Does an equipment floater cover rented equipment?
Only if the policy includes a rented/leased equipment endorsement. Without the endorsement, the floater covers only equipment you own. The endorsement extends coverage to rentals up to a per-item limit (typically $25,000 to $100,000) - confirm the limit is adequate for your typical rental size before binding.
How much does an equipment floater cost?
Typically 1% to 3% of total insured value per year. A $50,000 schedule might cost $500 to $1,500 annually. A $500,000 schedule might cost $5,000 to $15,000. Storage conditions, deductible, replacement cost vs ACV, and loss history move the rate within and beyond that range.
Does an equipment floater cover liability if my equipment causes damage to someone else?
No. An equipment floater is a property policy. It pays for damage to YOUR equipment. If your equipment causes injury or property damage to a third party, that is a General Liability or Business Auto claim, not an equipment floater claim. The two policies are designed to coordinate.
Should I schedule individual items or use blanket coverage?
Schedule items over $25,000 individually. Use blanket coverage for smaller equipment under that threshold. Most contractor programs combine both into one policy - scheduled coverage for heavy equipment, blanket coverage for tools and small equipment.
One Policy, Built for Equipment That Moves
An equipment floater (or whatever your agent calls it) is the property policy that covers the iron and the tools that earn your business its money when they leave the shop. The right schedule, the right limits, the right open-peril form, and the right rental endorsement turn a six-figure equipment loss into a paperwork problem instead of a business-ending event.
Grit places equipment floaters as part of the full contractor commercial program. Call us directly at (801) 505-5500 or request a quote online.
Related reading: Contractors Equipment / Inland Marine Insurance | Heavy Equipment Insurance: Cost and Coverage | Why Auto Doesn't Cover Tools | BAP, CGL, and Inland Marine