Tools & Equipment Insurance
What Tools & Equipment Insurance Covers
What Tools & Equipment Insurance Covers — everything contractors need to know to protect their tools and equipment.
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A Complete Guide to What Is (and Isn’t) Covered
Your tools and equipment are your livelihood. A single theft or job site loss can sideline your business for weeks. Tools and equipment insurance — also called inland marine or a contractor’s equipment floater — covers your gear wherever it goes: in your truck, on the job site, or in storage.
Theft — The Most Common Claim
Theft from job sites and work vehicles is the leading tools claim. A tools policy pays the replacement cost (or ACV, depending on your policy) of stolen items — power tools, hand tools, specialty equipment, and accessories. Most policies require evidence of forced entry for vehicle theft.
Fire and Smoke Damage
If your tools are damaged or destroyed in a fire — whether at a job site, storage unit, or in your truck — a tools policy covers the loss. This includes smoke damage that renders tools inoperable even without direct flame contact.
Vandalism
Intentional damage to tools or equipment by a third party is covered. If someone destroys your equipment on a job site or breaks into your truck and damages tools they couldn’t steal, vandalism coverage pays for replacement or repair.
Accidental Physical Damage
Many tools policies cover accidental damage — dropping a high-value instrument, equipment damaged during transport, or tools crushed by falling materials. Check your policy’s ‘open perils’ vs. ‘named perils’ language to confirm accidental damage is included.
What’s Typically Excluded
Wear and tear, gradual deterioration, and mechanical breakdown are typically excluded. Employee theft may be excluded or require a separate endorsement. Tools left in an unlocked vehicle may not be covered for theft by some carriers. Always read your policy exclusions carefully.