Tools and Equipment Insurance
Tools and equipment insurance belongs to the inland marine family, written for business property that leaves the building: gear in a work van, machines on a job site, materials waiting to be installed. Here is how the coverage is usually put together and what to bring to the conversation.
What tools and equipment insurance is for
Commercial property coverage is built around a fixed address. A great deal of a trade business’s value never stays there: the drills, saws and ladders that ride in the van every morning, the mower deck strapped to a trailer, the camera bag that goes from one client shoot to the next. When something is stolen from a job site or damaged on the road, the real question is whether any policy follows it out the door.
Inland marine is the insurance category written for that kind of moving property. The California Department of Insurance describes it as a specialized form of property insurance aimed mainly at business property in transport. Contractors usually meet it as a tools and equipment floater, sometimes called contractor’s equipment coverage, and the word floater simply means the protection travels with the gear rather than staying at one location.
How a tools and equipment policy is usually built
Most policies start with a schedule. Larger items such as a skid steer, a generator or a laser level are listed one by one with a make, model, serial number and value, while smaller hand tools are often grouped under a single blanket amount with a per-item cap. Ask where that cap sits, because a form written around heavy machines can treat a box of cordless tools very differently.
Insurer materials describe contractor’s equipment forms that reach owned gear as well as equipment leased, rented or borrowed from others, and some extend for a limited period to equipment bought after the policy begins. Rental reimbursement, which helps with the cost of renting a stand-in while your own machine is repaired, is often an add-on with its own waiting period. Ask, too, whether employees’ personal tools are included or need a line of their own.
Other pieces suit other trades. An installation floater addresses materials and fixtures you are responsible for between the supplier’s dock and the moment the work is finished and handed over, such as a water heater sitting in a garage or cabinets stacked in a hallway. Builder’s risk, by contrast, is written around a structure under construction as a whole. A scheduled property floater can list specialized portable items such as cameras, drones or musical instruments.
Businesses that ask about tools and equipment coverage
Contractors and handymen are the obvious group: their working capital rides in the truck, and a single break-in can stop a week of jobs. Landscaping businesses carry mowers, trimmers and blowers on open trailers and leave them at properties through the day, which puts theft and transit damage on the same list.
The question reaches well beyond construction. Cleaning businesses haul floor machines, extractors and carpet equipment between buildings and sometimes leave them in a client’s janitor closet overnight. Photographers move lenses, bodies, lighting and drones from shoot to shoot, and an event planner may own décor, audio gear or tents that spend more time at venues than in storage.
What to have ready for a tools and equipment quote
Build an inventory before you ask. For each larger item, note the description, make, model, serial number, when you bought it and what replacing it would cost today; group smaller tools by category with a total. Photos and receipts kept with the inventory make a later loss far easier to document, and the quote checklist covers the general business details underwriters also want.
Then describe how the equipment lives. Where does it spend the night: a locked garage, a fenced yard, an enclosed trailer or the van parked at an employee’s home? Is anything left at job sites, and how is it secured there? Mention machines you rent regularly and the loss wording in those rental agreements, any gear lent to subcontractors, and any equipment fitted with tracking or theft-recovery devices.
How equipment coverage fits with your other policies
A Business Owner’s Policy or commercial property policy is written mainly around property at your premises. The Insurance Information Institute lists personal property off premises as an optional addition to a BOP, and that extension is usually a modest amount meant for occasional trips, not a working fleet of tools. Ask how much off-premises protection your current policy carries before assuming the tools in the van are addressed.
Vehicles sit elsewhere. Insurers commonly leave trucks, vans and equipment permanently mounted on them to commercial auto, so a ladder rack or a built-in compressor raises a separate question from the loose tools inside. Theft by your own staff tends to fall outside equipment forms and into crime bonds, and injury or damage your equipment causes to other people is a general liability matter rather than an equipment one.
Rented machines, job sites and California conditions
Rental contracts often place loss or damage on the renter from pickup until return, and many rental counters offer a damage waiver at the desk. Read what the agreement makes you responsible for and compare it with the rented-equipment limit on your own policy before you accept or decline that waiver. General contractors and property owners sometimes ask similar questions about gear left on their sites overnight.
California adds its own mix of conditions. Outdoor crews working in wildfire country, equipment staged on sites near rivers or the coast, and gear stored in buildings across earthquake-prone regions each raise the question of which causes of loss a form lists or leaves out. Ask whether the policy is written on an open-perils or a named-perils basis, and read our guide to earthquake, flood and wildfire questions for the property side of those hazards.
What does tools and equipment insurance cost?
Coverage for tools and equipment is usually one of the smaller lines on a trade business’s insurance bill. National small-business insurers and marketplaces published annual inland marine premiums from about $150, with a median of about $48 a month, close to $580 a year, as of 2026; cleaning businesses sat near $42 a month. Those buyers are mostly firms with fewer than five employees and modest equipment values. A landscaper with several mowers on open trailers or a contractor scheduling heavy machines commonly pays well above that median, and published premiums pass $4,500. Read these as published industry figures, not a Mithril1 quote.
Equipment cover is rated per $100 of the value you schedule or blanket. One agency’s published average is $800 a year for $100,000 of equipment with a $1,000 deductible, or $0.80 per $100, with small tools rated as high as $3 per $100 and most policies carrying a $500 minimum premium. A $40,000 equipment list at $0.80 per $100 works out to $40,000 ÷ $100 × $0.80 = $320, so the $500 minimum applies; the same list at $3 per $100 comes to $1,200 a year. Adding a $60,000 skid steer lifts the schedule to $100,000 and, at $0.80, the premium to about $800.
Your price rises with more high-value items scheduled one by one, gear left overnight on job sites or open trailers, theft-prone small tools, rented or borrowed machines added to the policy, replacement-cost valuation, a lower deductible, and past losses, which the same agency says can double or triple the cost. It falls with locked, lit storage, an up-to-date list with serial numbers, a higher deductible, actual-cash-value settlement on older pieces and a clean loss history. Bring an equipment list with serial numbers and values to the quote checklist, or send it through our contact page.
A few useful answers
Common questions
Is tools and equipment insurance the same thing as inland marine?
Tools and equipment coverage is one kind of inland marine insurance. Inland marine is the wider category for business property that moves or works away from your premises; contractor’s equipment floaters, installation floaters and scheduled property floaters all sit inside it.
Do I have to list every tool on a tools and equipment policy?
Larger items are usually scheduled individually with serial numbers and values, while small hand tools are grouped under a blanket amount with a per-item limit. Ask where the line between the two falls on the form you are quoted.
How does tools and equipment insurance treat tools left in a locked van?
Ask directly. Some forms set conditions for theft from an unattended vehicle, such as visible signs of forced entry, and equipment bolted to the vehicle itself is usually handled under commercial auto rather than the equipment form.
Can tools and equipment coverage reach machines I rent?
Many contractor’s equipment forms can include leased, rented or borrowed equipment, often with a separate limit. Compare that limit with the replacement value in your rental agreement and with what the rental company holds you responsible for.
What separates an installation floater from tools and equipment coverage?
Tools and equipment coverage follows the gear you use to do the work. An installation floater follows the materials and fixtures that become part of the customer’s property, from delivery until the job is finished and handed over.
How should I set values for tools and equipment coverage?
Ask whether the form values a loss at replacement cost or actual cash value, then set amounts from what each item would cost to replace today rather than what you paid. Update the schedule whenever you buy, sell or retire equipment.