Contractor’s tools and equipment insurance

Contractor's tools and equipment insurance is a form of inland marine insurance for small tools and equipment. Also called equipment floater insurance, it's designed for construction and contracting companies and installation professionals that work at different job sites.

It protects movable tools and equipment wherever you take them, and pays for repair or replacement if they are lost, damaged, or stolen. However, it does not cover general wear and tear.

Contractor’s tools and equipment insurance protects hand tools, power tools, machinery, and other equipment that moves from place to place. The items typically must be relatively new and inexpensive.

This policy can cover a variety of items and incidents, including the following:

A standard commercial property insurance policy won't cover tools in transit or equipment stored at a worksite. It’s risky to move items and store them off-site, which is why you may need additional coverage.

Contractor's tools and equipment insurance benefits a wide range of professionals who bring tools and equipment to jobsites. Both small business owners and independent contractors should consider carrying this coverage.

Businesses that purchase this property coverage include:

Contractor's tools and equipment insurance is ideal for businesses that operate on a small budget. However, it doesn't cover every instance of property damage, and it's not designed for certain types of equipment.

Here are a few examples of common exclusions.

Complete Insureon’s easy online application today to compare contractor's tool and equipment insurance quotes from top-rated U.S. carriers. Our expert insurance agents can help you find the best coverage for your small business insurance needs.

Once you find the right policies for your small business, you can get coverage quickly and receive a copy of your certificate of insurance in less than 24 hours.

If you're a small business owner or a contractor, you may be able to add contractor’s tools and equipment coverage to your business owner’s policy.

A BOP bundles general liability insurance with commercial property insurance, usually at a lower premium than purchasing each policy separately. Some insurance providers will also let you add business interruption insurance to a BOP.

Read more about the eligibility requirements for a BOP.

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.

With actual cash value, on the other hand, an insurance company will provide reimbursement for the compromised equipment by looking at the item's current market value and then factoring in depreciation from the number of years that the item was used.

Because of this, a policy insured with actual cash value will typically cost less than one insured with replacement cost.

Simply put, it depends on the items you wish to insure. Contractor's tools and equipment insurance is designed for items valued at less than $10,000. Specialized equipment or heavy machinery may require inland marine insurance.

If you're looking at an item like a costly bulldozer, backhoe, or excavator, inland marine insurance is likely the appropriate policy. If you only need insurance coverage for 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.

If you're unsure which policy you need, consult a licensed insurance agent who can help you find the right equipment insurance policy for your small business.