Monday morning. The crew is ready. The tools are gone. Someone broke into a jobsite trailer over the weekend, and now the contractor has to replace equipment before the job can move forward. It is tempting to assume general liability will handle the loss—but that coverage generally is not designed for your own stolen tools.

The important question is not simply whether you have insurance. It is whether the equipment you rely on, the places you work, and the way you use that equipment are addressed by your actual policy.

What Is Contractors Tools and Equipment Insurance?

Contractors tools and equipment insurance is property coverage designed for eligible movable tools and equipment used in construction. You may also hear it called contractors equipment coverage or an inland marine policy. The name can sound unusual, but it is not limited to marine operations: this type of insurance often addresses property that moves from one place to another.

Think about a general contractor managing several jobsites, an HVAC contractor carrying specialized installation tools, or a concrete contractor transporting equipment between projects. Their property exposure changes as the work moves.

This coverage works alongside—not in place of—contractor general liability insurance, commercial auto insurance, and builders risk insurance. Each addresses a different type of exposure.

What Tools and Equipment Can Be Covered?

The answer depends on the policy, the equipment, and whether it is owned or in your care under another arrangement. Common examples include:

• Hand and power tools: drills, saws, grinders, nail guns, and specialty trade tools.
• Portable jobsite equipment: generators, compressors, testing equipment, and similar items.
• Heavy equipment: eligible skid steers, mini excavators, and other machinery, often subject to scheduling or special terms.
• Trade-specific equipment: plumbing, HVAC, concrete, roofing, welding, and related tools.
• Rented, leased, or borrowed equipment: potentially eligible when the policy expressly provides for that arrangement.

What Losses May Be Covered?

Theft from a jobsite, trailer, or storage area

A secured jobsite container is broken into overnight. Theft may be a covered cause of loss, but the details matter: policy limits, deductibles, security conditions, and exclusions all need review. A missing item with no evidence of theft can raise a different question.

Accidental physical damage

A covered accident damages a piece of eligible equipment while it is being moved or used. Whether the loss is covered depends on the cause, the coverage form, and any applicable exclusions.

Fire, vandalism, and other covered events

Equipment can be damaged while sitting idle as well as during active work. Review the listed covered causes of loss and any conditions that apply at temporary locations.

Damage in transit

Contractors regularly move tools and machinery between shops, vehicles, and jobsites. Some equipment policies include transit protection; others restrict it. Confirm how equipment is transported and whether loading, unloading, or other conditions affect the protection.

What Might Not Be Covered?

No tools and equipment policy covers every problem. Common limitations or exclusions may involve:

• Wear and tear: gradual deterioration and routine maintenance.
• Mechanical or electrical breakdown: internal failure may need different coverage.
• Unexplained disappearance: missing property is not always treated the same as a documented theft.
• Employee dishonesty or intentional acts: separate coverage may be needed.
• Property above special limits: an expensive tool may exceed a per-item or unscheduled-property limit.
• Job delays and lost income: damage to equipment does not automatically mean lost working time, contractual penalties, or lost income are covered.

Even when the cause of loss is covered, deductibles, valuation provisions, and policy conditions can affect the amount payable. Reviewing those details before a claim is far better than finding them afterward.

Does General Liability Cover Stolen Tools?

Generally, no. General liability insurance is primarily intended to address certain claims involving third-party bodily injury or property damage. It is not ordinarily the coverage that protects a contractor’s own tools from theft or accidental physical damage.

For example, accidentally damaging a customer’s property presents a different insurance question from finding your own equipment missing from a jobsite. Read more about general liability coverage for contractors and how it fits into a broader general contractor insurance program.

Tools and Equipment Insurance vs. Builders Risk

Both involve property, but they usually address different things. Builders risk insurance commonly focuses on covered property associated with a construction project. Contractors equipment coverage focuses on eligible movable tools and equipment used to perform the work.

• Builders risk: covered project property, subject to the project policy.
• Tools and equipment: eligible tools, machinery, and movable equipment.
• General liability: certain third-party liability claims.
• Commercial auto: covered vehicle-related exposures, not automatic protection for every tool carried inside.

A contractor working on an addition may need to consider both the materials becoming part of the building and the portable equipment used to install them. One policy should not be assumed to replace the other.

Where Does Equipment Coverage Apply?

Location matters because contractors rarely keep their tools in one place. Review whether your policy addresses:

• Active jobsites: including temporary locations and unattended equipment.
• Work trucks and trailers: particularly theft from vehicles and any protective-safeguard conditions.
• Transit: travel between jobs, including loading and unloading where applicable.
• Shops and storage facilities: including location-specific limits.
• Work across state lines: coverage territory and policy conditions when operating in California, Texas, or elsewhere.

A policy that works for equipment kept at one location may not fit a contractor who routinely moves equipment among several projects.

How Much Tools and Equipment Coverage Do You Need?

Start with what you actually use to complete the work. An equipment list is often the most useful first step.

• List each major item, its make and model, and serial number where available.
• Record estimated replacement values and whether equipment is owned, rented, or leased.
• Identify the highest combined equipment value you might have at a single jobsite.
• Review individual item limits, blanket limits, and deductibles.
• Ask whether losses are valued at replacement cost or actual cash value, and what conditions apply.
• Update the inventory when you add equipment or take on a different kind of project.

What About Rented or Leased Construction Equipment?

You rent a skid steer for a two-week project. The rental agreement makes you responsible for certain damage, and the rental yard wants evidence of insurance. Before the machine leaves the yard, check what the agreement requires and what your current policy actually provides.

Review the rental agreement before taking possession

Look for the equipment value, rental period, location, damage responsibilities, and any insurance requirements. Coverage for property of others or rented equipment is not automatic under every policy.

Verify the equipment and limits

Share the equipment description, value, dates, and agreement with your broker. That gives you a clearer answer than assuming a general certificate settles the issue.

If you have a rental agreement in hand, send it to IC Insurance Solutions for review.

Does Your Construction Contract Require Equipment Insurance?

Some construction contracts and rental agreements include requirements for specific equipment coverage, limits, evidence of insurance, or loss-payee arrangements. Those requirements should be read alongside the actual policy.

A certificate of insurance can help document existing coverage, but a certificate cannot add coverage that the policy does not contain. If the job calls for something specific, the policy and applicable endorsements need to support it.

See IC’s guide to construction job insurance requirements and its contractor certificate of insurance help page if you have a certificate request or contract provision you are trying to satisfy.

What to Send Us for a Coverage Review

You do not need to know every insurance term. Tell Rich what equipment you use and what the job requires. Helpful information includes:

• An equipment list with approximate values.
• Whether items are owned, rented, leased, or borrowed.
• Where equipment is stored, transported, and used.
• Any rental agreements or construction contract insurance requirements.
• Your current coverage information, if available.
• The date the job starts or documentation is needed.

Rich can help review the exposures and explain what may need attention. You can send your information through the contact page or call or text directly.

Why Contractors Work With IC Insurance Solutions

A general contractor juggling schedules, subs, equipment, and contract requirements needs answers that fit the job—not a generic explanation of an insurance term. Rich Tygett works with contractors to review coverage requirements, identify possible gaps, and understand how different policies work together.

Whether you are managing multiple projects, adding equipment, or moving into larger jobs, the conversation starts with what you are doing and what your contract requires. You can call or text Rich directly when questions come up.

Frequently Asked Questions

Is contractors tools and equipment insurance the same as inland marine insurance?

Contractors tools and equipment coverage is commonly written on an inland marine form. Inland marine is a broader category of property insurance, so the specific coverage form and endorsements determine what is protected.

Does general liability insurance cover stolen tools?

Generally, general liability insurance does not cover theft of a contractor’s own tools. Contractors tools and equipment coverage may address eligible theft losses, subject to the policy.

Are tools covered if stolen from my work truck or trailer?

They may be, but it depends on the policy’s theft provisions, security requirements, deductibles, and limits. Commercial auto insurance should not be assumed to cover the tools inside a vehicle.

Does coverage apply while equipment is being transported?

Transit protection may be included, depending on the coverage form, how the equipment is moved, and applicable exclusions and conditions.

Is rented or leased equipment covered?

Coverage may be available for rented or leased equipment, but it is not automatic. Review the rental agreement, policy definitions, limits, and any required endorsements before taking possession.

Does builders risk insurance cover my tools and equipment?

Not automatically. Builders risk typically addresses covered property associated with a construction project, while contractors equipment coverage addresses eligible movable tools and equipment. The policies should be reviewed together.

How much tools and equipment insurance do I need?

Start with an accurate inventory and equipment values. Then review maximum values at any one location, individual item limits, valuation terms, deductibles, and any contractual requirements.

Can a certificate of insurance show equipment coverage?

A certificate may provide evidence of existing coverage, but it cannot create coverage or change the policy’s terms. The underlying policy must actually address the required equipment exposure.

Let’s Make Sure Your Equipment Is Addressed Before the Next Job

Your tools and equipment help keep your crew moving. If you are not sure what your current policy covers—or a job or rental agreement calls for protection you have not dealt with before—send over the details. Rich will help you understand what needs to be reviewed and the next step.