Tools and Equipment Insurance

What tools and equipment insurance covers

Tools and equipment insurance protects the movable property your business relies on, wherever it is: on a job site, in your truck, at a client's home, at an event venue, or in storage. In insurance language it is a type of inland marine coverage, sometimes called contractor's equipment insurance or an equipment floater.

It typically covers loss or damage from:

• Theft, including break-ins at job sites and storage units.
• Accidental damage, such as dropping a camera or a ladder falling on a saw.
• Fire, smoke and vandalism.
• Many weather events, depending on the policy.
• Damage in transit while gear is being moved.

Policies can cover small tools under a blanket limit (for example, any tool worth under a set amount) and list expensive items, like a mini excavator or a cinema camera, individually on a schedule.

Example: A general contractor leaves a locked job-site box overnight. Thieves cut the lock and take several power tools and a generator. Tools and equipment coverage pays to replace them, minus the deductible, so work can restart the next day.

Example: A photographer drops a camera body and lens at a wedding. The policy pays for repair or replacement, depending on how the gear is valued.

Why property insurance alone isn't enough

Commercial property coverage, including the property part of a business owner's policy, is designed mainly for items at your business location. Many policies give only limited coverage, or none, for property that is away from your premises, in a vehicle or at a client site. Commercial auto insurance covers the vehicle, not the tools inside it. Tools and equipment insurance fills that gap.

What it doesn't cover

• Wear and tear, rust, gradual deterioration.
• Mechanical or electrical breakdown, unless you add equipment breakdown coverage.
• Theft from an unattended or unlocked vehicle, which many policies exclude or limit. Read the conditions carefully.
• Unexplained loss, sometimes called mysterious disappearance or inventory shortage.
• Damage you cause to others' property, which is a general liability matter.

Who needs tools and equipment insurance?

Any business whose income depends on gear that travels:

• Trades such as electricians, plumbers, HVAC contractors, painters, roofers and handymen.
• Landscapers and pressure washing businesses with mowers, trailers and washers.
• Creative pros like photographers, videographers and DJs.
• Mobile service businesses, such as cleaning businesses and massage therapists who travel with tables and supplies.

Ask yourself: if your gear were stolen tomorrow, could you afford to replace it and keep working? If not, this coverage is worth pricing.

How much does tools and equipment insurance cost?

Insureon's 2026 cost data does not publish a separate median for tools and equipment coverage. Its price depends mostly on how much equipment you insure and how risky its use is. The main factors are:

• Total value of the tools and gear covered.
• Type of equipment. Heavy machinery costs more to insure than hand tools.
• Where and how it's stored, such as locked vehicles, secure yards or job-site boxes.
• Valuation method. Replacement cost costs more than actual cash value.
• Deductible. A higher deductible lowers the premium.
• Claims history, especially past theft.

For the median costs of other common policies, such as general liability ($45 a month) and a BOP ($83 a month) in Insureon's 2026 data, see how much does business insurance cost.

Limits, valuation and deductibles explained

• Limit: set it to the total value of your equipment. If you list items individually, each scheduled item has its own limit.
• Replacement cost pays to buy a new item of similar kind and quality. Actual cash value subtracts depreciation, so older tools pay out much less.
• Per-item limits: blanket coverage often caps any single item, so list expensive items separately.
• Deductible: the amount you pay per claim, often a few hundred to a few thousand dollars.

Rented or borrowed equipment is another common gap. If you rent a lift or excavator, ask about rented equipment coverage instead of relying on the rental company's damage waiver.

How to buy tools and equipment insurance

Build an inventory with serial numbers and photos, then ask a licensed agent or insurer for inland marine or contractor's equipment quotes. Many insurers can add it to a business owner's policy or general liability package. Read the theft conditions, choose a valuation method, and update your schedule whenever you buy or sell equipment.

How to protect your tools and lower your premium

• Engrave or mark tools and record serial numbers.
• Lock up gear in secured vehicles, job boxes or storage, and don't leave tools in plain sight.
• Use GPS trackers on expensive equipment.
• Take photos of your inventory and store them in the cloud.
• Choose a higher deductible for small tools you can replace yourself.

What different businesses usually insure

Equipment coverage when you work for clients

Clients sometimes ask whether you can bring your own equipment onto their property and who is responsible if it is damaged there. Your tools and equipment policy protects your gear wherever it goes. Damage your equipment causes to their property is a liability claim, covered by general liability. Keeping both policies avoids arguments about who pays.

Example: A DJ's speaker falls off a stand at a wedding venue. The speaker breaks and also scratches the venue's dance floor. Tools and equipment coverage pays to replace the speaker, while general liability handles the venue's floor repair.