Contractors Equipment Insurance: Coverage for Tools, Heavy Equipment, and Materials in the Field

What Is Contractors Equipment Insurance?

Contractors equipment insurance is property coverage for the tools, equipment, and materials your business uses outside a permanent location. It covers what moves between jobsites, what rides in trucks, what sits at projects until installed, and what travels in transit. Despite the older name "inland marine" (a leftover from when maritime insurance was extended to cover overland transport), the coverage applies entirely to land-based contractor property.

You will hear the same product called several things depending on who you ask:

• Contractors Equipment Insurance - what most carriers call it
• Inland Marine - what most agents call it
• Tools Floater - the version focused on hand and power tools
• Equipment Floater - the version focused on heavy equipment, often with each item scheduled
• Installation Floater - the version that covers materials being installed at a project until they become part of the building

All five are forms of the same underlying inland marine policy form, configured for different equipment categories. A typical contractor program combines these into one policy with blanket coverage for tools and small equipment plus scheduled coverage for high-value heavy equipment.

What Contractors Equipment Insurance Covers

Tools and hand equipment. Power tools, hand tools, diagnostic equipment, laser levels, welding rigs, compressors. Everything your crew carries to the jobsite every day. These are the items most commonly stolen and most commonly uninsured.

Heavy equipment. Excavators, skid steers, boom lifts, concrete pumps, generators, telehandlers. Whether you own it or finance it, a single piece of heavy equipment can represent a six-figure loss if stolen, vandalized, or damaged on site.

Materials in transit. Pipe, wire, lumber, fixtures, and other materials being delivered. If a load of copper pipe gets stolen off a flatbed or a delivery truck rolls over and destroys $30,000 in electrical fixtures, contractors equipment insurance covers the loss.

Materials and equipment stored at the jobsite. Once materials arrive at the project, they sit exposed until the crew installs them. Your commercial property policy does not cover them - they are not at your permanent address. Contractors equipment insurance is what does.

Leased or rented equipment. If you rent an excavator or a boom lift and it gets damaged on your jobsite, you are responsible. With the right endorsement, your contractors equipment policy covers rented and leased equipment. Always check your policy before signing a rental agreement - the rental company's damage waiver often costs more than adding the coverage to your own policy.

Installation floater. Materials you are installing on a project are covered until they become a permanent part of the building. This is critical for trades like electrical, plumbing, and HVAC where you bring expensive materials to a site and install them over days or weeks before the work is complete.

Electronic equipment. Computers, tablets, survey equipment, drones, and other electronic gear used in the field. If a drone goes down on a job or a tablet gets crushed in a work truck, contractors equipment insurance covers the replacement.

Who Needs Contractors Equipment Insurance?

Contractors of every trade. Your tools and equipment ride around in trucks and sit on open jobsites every single day. Excavation contractors with heavy equipment fleets, electricians with specialized diagnostic tools, HVAC contractors carrying refrigerant recovery machines and gauges - every trade has property that lives outside the building.

Manufacturers and distributors. If you ship goods, store inventory at client locations, or have valuable property regularly leaving your warehouse, contractors equipment insurance covers those assets in transit and at temporary locations.

Anyone with expensive portable equipment. Surveyors, photographers, event production companies, technology installers - any business where high-value equipment travels to different locations daily.

The common thread: if valuable property regularly leaves your permanent location, you need this coverage. Commercial property insurance stops at your building's walls. Contractors equipment insurance picks up where property insurance leaves off.

What Contractors Equipment Insurance Costs

Premiums typically run between 1% and 3% of the total insured value per year. That is one of the more affordable commercial coverages relative to the protection it provides.

A contractor with $50,000 in tools and hand equipment might pay $500 to $1,500 per year. A contractor with a $300,000 excavator on a heavy equipment floater might pay $3,000 to $9,000 per year. A mid-size contractor with a $500,000 combined equipment and tool inventory could be looking at $5,000 to $15,000 annually.

Several factors affect the premium:

• Equipment type and value. Heavy equipment costs more to insure than hand tools. Higher total insured value means higher premium, but the rate per dollar of coverage often decreases as the total goes up.
• Storage conditions. Equipment stored in a locked building or fenced yard costs less to insure than equipment left on open jobsites overnight. Theft is the number one claim, and secure storage reduces the risk.
• Usage and territory. Equipment used in heavy-duty applications or high-theft areas carries a higher premium. A skid steer working demolition sites in a major metro costs more to insure than one doing residential landscaping in a rural county.
• Deductible. Higher deductibles lower the premium. On larger equipment schedules, choosing a $2,500 or $5,000 deductible instead of $1,000 can make a meaningful difference in annual cost.
• Replacement cost vs. actual cash value. Replacement cost coverage pays what it costs to buy the same equipment new. Actual cash value pays what your used equipment is worth today. Replacement cost costs more but is almost always worth it - your 5-year-old excavator costs the same to replace whether the insurance company values it at full price or at a depreciated number.

The Coverage Gap Most Contractors Do Not Know About

This is the gap that catches more contractors off guard than any other.

Commercial auto insurance covers the vehicle. It covers liability if you cause an accident, and it covers physical damage to the truck or van itself. It does not cover what is inside the vehicle.

If someone breaks into your locked work truck overnight and steals $15,000 in power tools, your commercial auto policy pays for the damage to the truck - the broken window, the damaged lock. It pays nothing for the tools. Zero. The tools were never covered by auto insurance in the first place.

The same gap applies at the jobsite. Your commercial property policy covers your building, your office, and the inventory inside your permanent location. It does not cover a single thing sitting on a jobsite two miles away.

Contractors equipment insurance is the only policy that covers your tools and equipment on the road, on the jobsite, in the truck, or in transit. Without it, you are carrying the full risk on every piece of equipment that leaves your shop.

We see this gap every time a contractor calls after a theft. The commercial auto carrier denies the tool claim. The property carrier denies the jobsite equipment claim. And the contractor finds out the hard way that they needed a policy they never knew existed.

Read the full breakdown: Why Your Commercial Auto Policy Doesn't Cover the Tools Inside Your Truck - includes a theft prevention checklist and the three questions to ask your agent right now.

When Mobile Equipment Becomes an Auto: The Symbol 19 Gap

This is the second coverage trap most contractors never hear about, and it is the one that creates the biggest single-claim exposures we see in this business.

By default, mobile equipment - excavators, skid steers, front loaders, cherry pickers, telehandlers, road maintenance equipment - is covered by your General Liability policy when it is operating at a jobsite. Digging, lifting, drilling, paving. That is GL territory.

But the moment that same equipment is driven on a public road in a state with compulsory motor vehicle insurance law, the 2004 ISO change reclassifies it as an "auto." Your General Liability policy drops it. Your Business Auto Policy needs to pick it up - but only if your auto policy has the right symbol.

Most contractors are written on Symbol 7 (specifically described autos) plus Symbol 8 (hired). Mobile equipment that was never scheduled is not covered. There is no symbol broad enough to pick it up automatically. Both policies go silent.

The fix:

• Symbol 1 (Any Auto) on the BAP automatically includes Symbol 19 for mobile equipment subject to compulsory law. This is the Grit standard for every contractor and every bonded program.
• Symbol 19 endorsed onto a Symbol 7 BAP if Symbol 1 is not available for the risk class.
• Endorsement CA 23 05 to schedule specific mobile equipment as covered autos when Symbol 1 cannot be written.

If your BAP runs Symbol 7 only and you own equipment that occasionally drives on public roads, you have a coverage gap right now. Most contractors do not know this until a claim hits.

Deep reads on the Symbol 19 / mobile equipment problem:

- Commercial Auto Symbols for Contractors: Symbol 1 Guide
- Mobile Equipment vs Auto: When Your Bulldozer Becomes an Auto

How Contractors Equipment Coordinates With Your Other Policies

Contractors equipment insurance does not sit in a vacuum. It coordinates with your General Liability, your Business Auto Policy, and (if you have one) your Builders Risk policy. The clean rules:

• BAP covers motion. When a vehicle or piece of equipment is moving on a public road, the auto policy responds.
• CGL covers operation. When equipment is operating at a jobsite (digging, lifting, drilling), the General Liability responds for third-party harm.
• Contractors Equipment covers your property. If something happens to YOUR tools, equipment, or materials - regardless of where they are or what they are doing - this is the policy that pays.
• Property covers things you own. Liability covers third parties. Damage to your equipment is contractors equipment. Damage to a third party is GL or BAP depending on whether a vehicle was involved.

The three policies are designed to work together. They fail when they are placed by three different agents, or by one agent who does not read the endorsements.

Pillar guide: BAP, CGL, and Inland Marine - Which Policy Covers What When Your Equipment Moves - the complete decision tree by scenario, where the gaps live, and how a coordinated program closes them.

How Grit Places Contractors Equipment Insurance

We insure everything from a $5,000 tool package for a one-truck operation to a $500,000-plus equipment fleet for a mid-size contractor. The approach depends on what you own and how you use it.

Blanket coverage for smaller items. For hand tools, power tools, and smaller equipment, blanket coverage insures the entire category without requiring a list of individual items. You report the total value, and the policy covers any tool up to the blanket limit.

Scheduled coverage for high-value equipment. Excavators, boom lifts, concrete pumps, and other high-value equipment get individually listed on the policy with specific values. This guarantees the right payout if a $200,000 machine gets totaled.

Replacement cost as the standard. We place contractors equipment on a replacement cost basis so you get a new tool or machine - not a depreciated payout that leaves you short when you need to replace it.

Full program coordination. Your contractors equipment policy works alongside your general liability, commercial auto, and surety program. One agency managing the full insurance program means no coverage gaps and no duplicate coverage. When you add a new piece of equipment, we know exactly which policy it belongs on.

Frequently Asked Questions

What is the difference between contractors equipment insurance and inland marine insurance?

They are the same product. "Inland marine" is the older agent term that comes from the original insurance form. "Contractors equipment insurance" is what most modern carriers call the same coverage. Both refer to property insurance that covers tools, equipment, and materials when they are away from your permanent business location.

Does commercial auto insurance cover my tools?

No. Commercial auto insurance covers the vehicle itself - liability and physical damage to the truck or van. It does not cover the contents. If tools are stolen from your locked truck, commercial auto will not pay for them. You need contractors equipment insurance (also called inland marine or a tools floater) to cover tools, equipment, and materials that ride in your vehicles or sit on jobsites.

What is the difference between contractors equipment insurance and commercial property insurance?

Commercial property insurance covers what is at your permanent business location - your building, office contents, and inventory in your warehouse. Contractors equipment insurance covers what leaves your location - tools on a jobsite, equipment on a trailer, materials in transit. If it moves between locations or sits at a temporary worksite, it belongs on contractors equipment.

Does contractors equipment insurance cover rented or leased equipment?

It can, with the right endorsement. If you rent an excavator or a boom lift and it gets damaged on your jobsite, you are responsible for the repair or replacement cost. Your contractors equipment policy can cover rented equipment if you add a rental equipment endorsement. Always check your policy before signing a rental agreement, because the rental company's damage waiver often costs more than adding the coverage to your own policy.

Is a skid steer covered by my commercial auto policy when on a public road?

Only if your Business Auto Policy has Symbol 1 (Any Auto) or Symbol 19 (Mobile Equipment Subject to Compulsory Insurance Law). If your BAP is on Symbol 7 only and the skid steer was never scheduled, the day it drives on a public road in a state with compulsory motor vehicle insurance law, both your CGL and your BAP go silent. Neither responds. This is one of the most common coverage gaps we see.

What is Symbol 19 on a commercial auto policy?

Symbol 19 covers mobile equipment that is subject to a state's compulsory or financial responsibility insurance law. You need it when your contractor mobile equipment may drive on public roads. The cleaner solution is Symbol 1 (Any Auto), which automatically includes Symbol 19. If Symbol 1 is not available for your risk class, Symbol 19 must be endorsed onto the BAP separately, or specific mobile equipment must be scheduled via endorsement CA 23 05.

How much does contractors equipment insurance cost?

Typically 1% to 3% of the total insured value per year. A contractor with $50,000 in tools and equipment might pay $500 to $1,500 annually. A contractor with $300,000 in heavy equipment might pay $3,000 to $9,000 annually. Storage conditions, deductible, and replacement cost vs. actual cash value all affect the premium.

What is the difference between an equipment floater and a tools floater?

Both are forms of contractors equipment insurance. An equipment floater covers heavy equipment - usually scheduled with each item listed by serial number and value. A tools floater covers smaller hand tools and power tools, usually written on a blanket basis without individual items scheduled. Most contractor programs combine both into one policy.

Protect Your Tools and Equipment

Your tools and equipment earn every dollar of revenue your business makes. If they are not insured when they leave your building, you are one theft or one accident away from replacing them out of pocket.

Grit places contractors equipment insurance alongside your full commercial insurance and bonding program - one agency, one team, every policy working together.

Call us directly: (801) 505-5500

Or request a quote online.

Related: Contractor Insurance | Excavation Contractor Insurance | Electrical Contractor Insurance | HVAC Contractor Insurance | Builders Risk Insurance | Commercial Auto Insurance | General Liability for Contractors