Contractor’s Tools and Equipment Insurance
What kind of work do you do?
Contractors with a table of tools.
Choose from the nation's best insurance providers
Logos of Insureon's business insurance carrier partners

Contractor’s tools and equipment insurance cost

The cost of contractor's tools and equipment insurance varies based on a number of factors about your business. Your premium is directly impacted by the type of equipment you wish to insure, your policy limits, industry risk, and more.

What is the average cost of contractor’s equipment insurance?

Small businesses pay an average premium of $14 per month, or about $170 annually, for contractor's tools and equipment insurance.

Our figures are sourced from the median cost of policies purchased by Insureon customers from leading insurance companies. The median offers a better estimate of what your business is likely to pay because it excludes outlier high and low premiums.

Understanding equipment and tool insurance cost factors

Here are a few factors that your insurance provider will consider when determining your premium for a tool insurance policy:

Coverage limits

A contractor's tools and equipment policy is property coverage for newer items valued at $10,000 or less. It's designed for items that are stored offsite or that travel to job sites, such as hand tools, power tools, saws, etc. Generally, the cost of your policy depends on the value of the items that you wish to insure.

Your coverage limit should match the value of the items you are insuring to guarantee you don’t end up paying for property damage out of pocket. Mobile items valued at more than $10,000, such as bulldozers, excavators, backhoes, and other heavy equipment, will require inland marine insurance coverage.

Property valuation method

When buying property insurance, you can choose to cover your property for its replacement cost or its actual cash value. Replacement value coverage costs more because it pays for the purchase of a brand-new replacement item. You can save money with actual cash value coverage, which instead covers the item's depreciated value.

Types of hazards covered

A contractor's equipment policy that covers open perils will cost more than a policy that covers named perils. Open perils coverage protects against all losses, except those specifically excluded in the policy. Named perils coverage only protects against losses listed in the policy.

Typically, contractor’s equipment insurance covers fires, vandalism, theft, and hail damage. Exclusions may include earthquakes, floods, equipment breakdown, and vehicle damage, which can be covered by commercial auto insurance.

Safety and security

Insurance providers will assess how safe your items are when determining your premium. For example, office equipment stored at a secure offsite location will cost less to insure than employee tools stored at a construction project in an area of high crime.

Additionally, insurers may look at how often the items are moved, as well as safety features like sprinkler systems and burglar alarms.

Industry risks

Insurance companies will also look at your industry and profession when determining the cost of any type of commercial property insurance. Small businesses in professions with higher risks and more frequent property claims can expect to pay more for this coverage.

For example, cleaning businesses pay an average of $38 per month for contractor's tools and equipment coverage, as they may face a higher risk of damaged or stolen items at a client's premises. General contractors and construction businesses, on the other hand, pay an average of only $14 per month for this policy.

The graph below illustrates how your type of business can affect the premium.

Monthly cost of contractor's tools and equipment insurance by industry

Top industries we insure

To see insurance costs for businesses in your industry, visit our industry-specific cost analyses.

Don't see your profession? Don't worry. We insure most businesses.

How can you save money on a contractor's tools and equipment insurance policy?

It’s easy to save money on your contractor's tools and equipment policy without compromising on coverage.

Some strategies to keep costs down include:

  • Bundle policies. Many small business owners opt for a business owner's policy (BOP) or commercial package policy (CPP), which combines commercial property insurance with general liability coverage at a lower rate than purchasing each policy separately.
  • Pay the annual premium. When you buy a contractor's tools and equipment policy, you can choose to pay your premium in monthly installments or annually. Insurers usually offer a discount when you pay the full annual premium.
  • Manage your risks. Insurers will consider your claims history when setting your premium. Risk management helps you avoid claims and keep your premium low. That includes choosing a secure site to store your items, or installing a burglar alarm on a van or truck.
  • Choose cheaper coverage options. Opting for lower limits or a higher deductible is an easy way to save money on your premium. However, be sure to choose a deductible you can easily afford. If you can’t pay your deducible, you can’t collect on a claim.
Get free tools and equipment insurance quotes

Why do small businesses choose Insureon?

Insureon is the #1 independent agency for online delivery of small business insurance. We help business owners compare quotes from top-rated providers, buy policies, and manage their coverage online.

By completing Insureon’s easy online application today, you can get free quotes for property insurance and other insurance products from top-rated U.S. insurance companies. Once you find the right policy, you can begin coverage in less than 24 hours and get a certificate of insurance. Our insurance agents can answer any questions and will help make sure you're fully protected.

What our customers are saying

Learn more about business insurance costs

Insurance premiums vary based on the policies a business buys. See our small business insurance cost overview or explore costs for a specific policy.

Updated: March 6, 2024

Find tools and equipment insurance quotes

Save money by comparing insurance quotes from multiple carriers.