Tools and Equipment Insurance
Tools and Equipment Insurance policy helps cover the cost of repairing or replacing tools and equipment if they are lost, stolen, or damaged due to accidents, theft, or unforeseen events. Typically, coverage applies to items that are less than five years old, ensuring your business can continue operating without costly disruptions.
Choose the right coverage from trusted insurance providers.
Why Small Businesses Need Contractors' Tools and Equipment Insurance?
For contractors and construction businesses, having the right insurance is just as important as having the right tools. Whether you’re a professional working on different job sites or managing installation projects, your equipment is essential to your work. Standard commercial property policies only cover items at a fixed business address, but this special form of inland marine insurance ensures your movable assets are protected wherever you go.
A floater policy is designed specifically for contracting companies and helps pay for the repair or replacement of lost, damaged, or stolen tools and equipment. This coverage extends to small items, shielding businesses from financial strain due to unexpected mishaps. Unlike standard coverage, it doesn’t account for general wear and tear, but it ensures your gear remains protected on the move.
Keep Your Tools Safe While Traveling
This insurance is made for business equipment that moves with you to different job sites. It specifically covers:
- Items worth up to $10,000
- Tools and equipment that are less than five years old
You can also add this coverage to a commercial property insurance plan or a business owner’s policy (BOP) for extra protection.
Additional Coverages to Consider
Protect your business from unexpected risks with these essential coverages:
General Liability Insurance
fCovers customer injuries, property damage, and advertising claims. Helps with legal costs and is often required for leases and contracts.
Under this plan
Customer injuries
Business interruption incidents
Accidental damage to customer property
Business Owner’s Policy (BOP)
Bundles general liability and commercial property insurance for cost-effective protection against property damage and liability claims.
Under this plan
Customer injuries
Business interruption incidents
Accidental damage to customer property
Workers’ Compensation Insurance
Covers medical expenses and lost wages for work-related injuries or illnesses. Required in most states for businesses with employees.
Under this plan
Employee medical expenses
Disability benefits
Workplace injury lawsuits
Cyber Liability Insurance
Covers expenses from cyberattacks, data breaches, and legal fees, ensuring your business stays secure online.
Under this plan
Data breach investigations
Customer notification expenses
Fraud monitoring services
What Does the Contractor’s Tools and Equipment Insurance Include?
This insurance helps protect hand tools, power tools, machinery, and other equipment that move between job sites. Typically, it covers items that are relatively new and inexpensive.
Here’s what this policy includes:
Stolen tools
If tools like hammers, saws, or other employee equipment are stolen from a worksite, client’s home or business, storage unit, or while in transit, this insurance can help with reimbursement.
Broken or damaged equipment
It covers the repair or replacement of damaged equipment, except for normal wear and tear.
Vandalism
If graffiti or damage occurs due to vandalism, the policy helps with repairs.
Leased or rented items
Some policies include coverage for contractors who lease or rent equipment, whether it’s for a new project or a temporary replacement while waiting for repairs.
Cost of Contractor’s Tools and Equipment Insurance
Since this insurance covers items worth up to $10,000, it is affordable for small business owners. On average, the monthly premium is around $14.
Several factors affect the cost of this policy, including:
- Industry risk
- Claims history
- Property valuation method
- How often are items moved
- Value of your tools and equipment
- Coverage type (named perils or open perils)
- Policy limits, deductibles, and other coverage options
Who Needs Contractor's Equipment Coverage?
A standard commercial property insurance policy does not cover tools that are in transit or stored at a worksite. Since moving and storing equipment off-site comes with risks, many professionals need extra coverage to protect their items.
This insurance benefits small business owners and independent contractors who rely on tools at different job sites. Businesses that should consider this coverage include:
Construction businesses
If a toolbox is stolen from a client’s backyard or a scissor lift breaks during a project, this policy covers repair or replacement costs. It also protects against loss during transit or storage.
Installation businesses
Installation professionals leave equipment at homes and offices. This insurance helps cover stolen or damaged tools, such as a fence installer’s post-hole digger or an appliance installer’s wrench set.
Landscaping businesses
Since landscapers work at various outdoor locations, this coverage is crucial. It helps replace stolen lawnmowers, broken leaf blowers, and other essential tools used in tree services and lawn care.
For contractors who constantly move their work equipment, this policy provides essential protection against unexpected losses.
What does the contractor’s tools and equipment insurance not cover?
While contractors’ tools and equipment insurance is a great option for small businesses, it does not cover every type of damage or equipment. Some items and situations are excluded from this policy, including:
Wear and tear
Damage caused by general wear is not covered. For instance, if a lawnmower’s blade gets dull over time, the insurance won’t pay for a replacement.
Breakage or misuse
If a worker misuses a tool, such as trying to vacuum water with a leaf blower, any resulting damage won’t be covered.
Older items
Equipment that is more than five years old is typically not eligible for this policy.
Expensive items
Items worth more than $10,000 are not included. A small tractor may be covered, but a high-end model will not.
Vehicles
Business-owned vehicles require commercial auto insurance, while rented or personal vehicles used for work should be covered by hired and non-owned auto insurance (HNOA).
This policy is best suited for movable, affordable, and newer tools, making it a practical choice for contractors working within a budget.
Two ways to start your coverage
Quotes online
Enter your information through a simple application to get personalized insurance quotes from multiple A-rated companies. Eagle Nation uses an easy system that lets you compare options online and choose the top coverage for your business in minutes.
Talk to an agent
Verified Tools & Equipment Insurance Reviews
Hear from customers like you who purchased insurance.
FAQs about contractors' tools and equipment insurance
If you're a small business owner or a contractor, you might be able to add a contractor’s tools and equipment insurance to your business owner’s policy (BOP).
A BOP combines general liability insurance with commercial property insurance, often at a lower cost than buying them separately. Some insurance providers also allow you to include business interruption insurance in a BOP, giving extra protection for unexpected losses.
With a contractor’s tools and equipment insurance, you can choose between replacement cost coverage or actual cash value coverage for your tools and equipment.
If you choose replacement cost, your insurance will pay for a brand-new item to replace any lost or damaged equipment at a worksite.
With actual cash value, the insurance company will calculate the current market value of the equipment, factoring in depreciation based on how long it has been used.
Since actual cash value policies consider depreciation, they usually have lower premiums compared to replacement cost coverage.
The key difference is the value of the items covered. The contractor's tools and equipment insurance covers tools and equipment under $10,000, like lawnmowers, saws, and hand tools.
For specialized or heavy machinery like bulldozers, backhoes, or excavators, inland marine insurance is a better fit. If your machinery suffers mechanical failure, you may need equipment breakdown insurance or boiler and machinery insurance.
If unsure, consult a licensed insurance agent to find the best coverage for your small business.
"This insurance is a lifesaver for my small construction business. When my saw was stolen from a job site, the claim process was smooth, and I got a quick reimbursement. Highly recommended!"