What does contractor’s tools and equipment insurance cover?

Contractor's tools and equipment insurance, also called equipment floater insurance, can pay to replace tools and equipment stolen from your shop, a client's home or office, or another off-site location. It also covers items stolen in transit.

Example: An electrician’s toolbox is stolen while left overnight at an office worksite. Contractor’s tools and equipment insurance covers the cost of purchasing a new toolbox and replacing the tools that were stolen.

This policy can cover the cost of replacing a broken tool or repairing a piece of equipment that has been damaged. However, it does not cover normal wear and tear.

Example: At a construction site, an employee accidentally drives a small excavator into a pit, damaging the bucket. This policy can pay to repair the damaged part.

Contractor’s tools and equipment insurance covers the cost of removing graffiti and repairing equipment damaged by vandalism.

Example: A vandal enters a construction site at night and breaks the windshield on a general contractor's backhoe. This policy can cover the windshield’s replacement cost.

Some policies include protection for contractors who lease or rent equipment. That could include coverage for equipment that you rent for a project, or while you wait for repair of damaged equipment.

Example: A painter purchases a scissor lift to work on a vaulted ceiling, but has to return it due to a defect. This policy covers the cost of renting a scissor lift while waiting for a replacement.

Contractor's tools and equipment insurance is ideal for businesses that operate on a small budget. However, specialized machinery or equipment valued at over $10,000 may require inland marine insurance.

Small construction companies and contractors can often add contractor’s tools and equipment insurance to a business owner’s policy. If your business is not eligible for a BOP, check with a licensed agent to see if you can add it to your general liability insurance or another policy.