Last Updated on October 16, 2026 by Syed Sarim Naqvi
Contractor tools and equipment insurance is an inland marine policy that covers mobile property such as power tools, laser levels and heavy machinery against theft, damage and loss, wherever it sits: on a job site, in transit or in storage. Despite the name it has nothing to do with boats, scheduled equipment is quoted at roughly 1% to 2% of insured value a year, and small shops with modest tool kits may start around $15 a month.
Key Takeaways
- Inland marine covers property that moves between locations, which commercial auto and standard property policies often do not
- Policies use scheduled cover (each item listed with a value) or blanket cover (one limit for small tools), and many contractors use both
- QuoteSweep puts scheduled contractors’ equipment at about 1% to 2% of insured value a year, and a broker guide says small shops with under about $10,000 of tools can start near $15 a month
- Mechanical or electrical breakdown is typically excluded, and employee theft usually falls under crime cover, not the floater
- The two limits that matter most are the per-item limit on scheduled equipment and the aggregate blanket limit on tools
What Is Contractor Equipment Insurance?
The Contractor Matrix guide explains that commercial auto does not cover equipment working on a job site, and that contractor equipment insurance, usually structured as an inland marine policy or equipment floater, fills that gap by covering equipment wherever it is. Skyward Specialty notes that inland marine does not cover marine risks despite its name, and that the coverage was designed for items transported from job site to job site that are exposed to theft, damage or loss. The California Department of Insurance, quoted in the Contractor Matrix guide, lists standard inland marine perils as fire, lightning, windstorm, flood, earthquake, landslide, theft, collision and overturn of the transporting vehicle.
Which Floater Does What?
| Floater | What It Covers | Typical Basis |
|---|---|---|
| Contractors equipment floater | Owned heavy equipment such as excavators, loaders and cranes | Scheduled |
| Tools floater | Hand tools, power tools, laser levels and testing equipment | Blanket |
| Installation floater | Materials and equipment being installed at a project site until installation is complete | Per job or blanket |
| Rental equipment cover | Rented or borrowed equipment, as an endorsement or a separate floater | Scheduled or blanket |
Grit Insurance says most contractor programs combine these into a single policy: a scheduled floater for heavy equipment, a blanket floater for tools and an installation floater for active job materials. ALKEME’s guide adds that endorsing a policy to cover rented equipment is usually more cost-effective than coverage offered by the rental dealer.
What Is the Difference Between Scheduled and Blanket Cover?
Complete Markets explains that scheduled forms list individual items with values and serial numbers, which suits high-value machines where accurate replacement cost matters, while blanket cover pools small tools under a single limit without itemizing each piece. Grit Insurance gives an example: a $250,000 excavator should be scheduled at $250,000 with replacement cost cover, while small tools go on a blanket limit, and the blanket limit should be at least the value of your worst-case theft, since stealing an entire tool truck could exceed it. Complete Markets also warns that failing to inventory and value equipment accurately can cause coverage gaps or claim denials.
How Much Does It Cost?
QuoteSweep gives scheduled contractors’ equipment as roughly 1% to 2% of insured value annually. A Six-Thirteen Business Insurance guide says small shops carrying under about $10,000 of scheduled tools often start around $15 a month. Grit Insurance lists pricing factors as equipment type, storage conditions, deductible and replacement cost versus actual cash value. As an illustration only, a $250,000 excavator at 1% to 2% would cost about $2,500 to $5,000 a year.
- Valuation basis: Atlantic Casualty lists actual cash value, replacement cost and agreed amount; ALKEME suggests actual cash value for older equipment where replacement cost may be excessive
- Storage and security: ALKEME recommends GPS tracking, locked storage, job site cameras and ignition disable devices to cut theft risk
- Deductible: a higher deductible lowers the premium
What Is Not Covered?
The Contractor Matrix guide says mechanical or electrical breakdown is typically excluded from standard inland marine policies, and that tools stolen by an employee usually fall under crime cover or a fidelity bond rather than the equipment floater. Complete Markets advises confirming sublimits, theft exclusions and any required security measures for small tools. Skyward points out a gap between builders risk and installation floaters: builders risk may not extend to items being installed or stored on site before installation. ALKEME adds that equipment transported on trailers may need both inland marine and auto cover depending on the loss.
Who Needs It?
QuoteSweep says general, electrical, plumbing, HVAC and specialty contractors all depend on equipment that moves from job to job, and that without inland marine a theft or total loss at a job site could shut down operations. The Six-Thirteen guide notes that when you file a claim, an up-to-date inventory list is the difference between a fast payout and an argument.
How Does This Connect to the Rest of Specialty Insurance?
Inland marine is the equipment counterpart to the people-focused covers in Workers’ Compensation Insurance Explained. It shares the transit logic of Marine Cargo Insurance Explained, and the mobile-gear problem of Content Creator and Influencer Insurance Explained and Drone Insurance Explained. For income lost when a theft stalls work, see Business Interruption Insurance Explained.
FAQ
What is inland marine insurance for contractors?
Cover for tools and equipment that move between job sites, protecting them from theft, damage and loss wherever they are.
Does commercial auto cover my tools?
Generally no. Commercial auto does not cover equipment working on a job site, which is why inland marine exists.
What is the difference between scheduled and blanket?
Scheduled lists each item with a value; blanket covers small tools under one aggregate limit.
How much does it cost?
About 1% to 2% of insured value a year for scheduled equipment, and small shops may start near $15 a month.
Are employee-owned tools covered?
Often, under blanket tool cover or scheduled separately, depending on the insurer.
Does it cover rented equipment?
Many policies can be endorsed to cover rented or leased equipment, or you can buy a rental equipment floater.
Does it cover breakdown?
Typically not. Mechanical and electrical breakdown is usually excluded.
Glossary
- Inland Marine: cover for mobile property that moves between locations or sits at job sites.
- Equipment Floater: a policy covering movable equipment, scheduled or blanket.
- Scheduled Coverage: cover that lists each item with its own value.
- Blanket Coverage: a single limit for a group of smaller items.
- Installation Floater: cover for materials being installed until the job is complete.
- Replacement Cost: payment to buy equivalent new equipment without deducting depreciation.
Sources
- Grit Insurance: What Is an Equipment Floater? (floater types, scheduled versus blanket, limits)
- Skyward Specialty: Understanding Inland Marine Coverages (name origin, builders risk gap)
- QuoteSweep: Inland Marine Insurance, What Agents Need to Know (cost range, who needs it, rental cover)
- Contractor Matrix: Contractor Equipment Insurance (commercial auto gap, perils, exclusions)
- Service Mag: Tools and Equipment Coverage for Contractors (starting cost, inventory list)
- ALKEME: Construction Equipment Insurance Guide (floater types, theft prevention, trailers)
- Complete Markets: Inland Marine Coverage, Useful On-Site Forms (scheduled lists, sublimits, inventory accuracy)
- Atlantic Casualty: Inland Marine Products (valuation options, extensions)
Related reading: Food Truck Insurance Explained · Delivery and Rideshare Driver Insurance Explained · Professional Liability (E&O) Insurance Explained
Published October 2026. Prices, valuation terms and exclusions vary by insurer and change often; always keep an updated equipment inventory and read the theft and breakdown exclusions, and refresh this article periodically.
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