Your tools move around, so a normal property policy (which insures a fixed address) does not cover them, and neither does your auto policy; you need a tools-and-equipment floater, also called inland marine. It covers theft, fire, and damage to your gear on site, in the van, and in transit. The trap that voids more of these claims than any other is theft from an unlocked vehicle, so the policy only pays if the truck was locked and there is evidence of forced entry.
Why your other policies don't cover your tools
Contractor tools and portable equipment are "mobile property." They move constantly between shop, vehicle, and job site, and that is exactly what most policies are not built for.
- A standard commercial property policy covers a fixed premises. Your tools are not at a fixed premises.
- Your commercial auto policy covers the vehicle, not the gear inside it. Whether you need one at all, and the work-use trap in a personal policy, is in Do I need commercial auto insurance for my work truck?.
Inland marine insurance is the product built to cover mobile, in-transit, and off-premises property. The odd name is historical, from marine cargo coverage, but for a contractor it just means the policy that follows your tools wherever they go. A tools-and-equipment floater (sometimes called a contractor's equipment floater) is the contractor version.
What a tools-and-equipment floater covers
A floater typically covers your gear against:
- Theft from job sites, vehicles, and storage units.
- Fire, smoke, vandalism, and weather damage.
- Accidental breakage or drops.
- Equipment lost in transit.
It follows the tools rather than a location, which is what makes it the right product for a trade that never keeps its gear in one place.
The locked-vehicle exclusion (the trap that voids claims)
This is the single most common way a tools claim gets denied. Many inland marine policies carry an endorsement, commonly the ISO IH 99 23 "Theft From Unattended Vehicle Exclusion," that excludes theft from an unattended vehicle unless both of these are true:
- All doors, windows, and compartments were securely closed and locked, and
- There is visible evidence of forced entry.
The consequences are brutal and specific:
- Leave the truck unlocked, a window cracked, or the bed open, and a straight burglary is not covered.
- Overnight parking with tools visible is high-risk under this exclusion.
Protect the claim before you ever need it: lock every compartment, keep tools out of sight, and if gear is stolen, photograph the forced-entry evidence before you move anything and file a police report (often a policy condition for these claims). For preventing the theft in the first place, see Tool theft and security.
The setting that decides the size of the check
Everything above gets the claim paid. This decides how much. A floater settles a loss one of two ways, and the difference is not small.
- Actual cash value (ACV) pays what the tool was worth on the day it went: replacement cost minus depreciation. A five-year-old cordless kit that costs 600 dollars new might settle for a couple of hundred, because that is what a five-year-old one is worth.
- Replacement cost (RCV) pays what it costs to buy the equivalent new, usually once you have actually replaced it and sent the receipt.
This is the sting in the tail for the contractor who did everything else right: floater bought, truck locked, forced entry photographed, police report filed, claim accepted, and the check still does not re-kit the van. Nothing went wrong with the claim. The policy was written on ACV and nobody said so out loud.
Two things follow. Ask which basis you are on before you buy, not after a loss, because RCV costs more in premium and is usually worth it on a working kit that depreciates fast. And check the deductible against what you actually lose. Tool theft is often a few items rather than the whole van, so a 1,000 dollar deductible against a stolen 600 dollar nailer means there is no claim to make at all: you are insured for a disaster and self-insured for a Tuesday. If most of your losses would fall under the deductible, a lower deductible or a scheduled item is doing more for you than a bigger limit.
And check who is covered as well as what. Theft by your own employee is commonly excluded from a tools floater and sits under a separate employee-dishonesty or crime cover. If people work out of your van, ask the question rather than assuming the floater has it.
Rented and leased equipment
A floater can usually be extended to cover leased or rented equipment, protecting you from having to pay for damage to hired plant during the rental. If you rent equipment regularly, tell your broker so that rented equipment coverage is built in, rather than discovering after a loss that the rental yard's damage waiver is all you had.
Scheduling vs blanket coverage
Floaters cover tools two ways, and you usually want both:
- Scheduled coverage lists high-value items individually, often by make, model, and serial number, and insures each for a set value. Schedule the expensive stuff: the laser level, the survey gear, the big compressors.
- Blanket coverage insures your unscheduled small tools up to a total limit without listing each one.
The catch on blanket coverage is the per-item sublimit. If your blanket caps any single tool at a few hundred dollars, a stolen high-value item is only partly paid even though your total limit was plenty. Check that sublimit, and schedule anything worth more than it.
Common questions
Does my insurance cover tools stolen from my truck?
Only if you carry a tools-and-equipment floater (inland marine) and the vehicle was locked with evidence of forced entry. Your commercial auto covers the truck, not the tools inside it, and a standard property policy covers a fixed address, not mobile gear. So without a floater, stolen tools are on you. And even with one, the common locked-vehicle exclusion denies theft from an unlocked or open vehicle, so lock everything.
Why won't my business insurance pay for stolen tools?
Usually because the tools were not covered by the right policy, or the locked-vehicle exclusion applied. Tools are mobile property, so they need an inland marine / tools floater; commercial auto and standard property policies do not cover them. If you did have a floater, many carry an exclusion that denies theft from an unattended vehicle unless it was locked with visible forced entry. An unlocked truck, a cracked window, or an open bed can void the claim.
Is inland marine the same as a tools and equipment floater?
Effectively yes for a contractor. A tools-and-equipment floater is the contractor version of inland marine coverage. Inland marine is the broad category of insurance for mobile, in-transit, and off-premises property, named for its marine-cargo origins. The floater applies that idea to your tools and portable equipment, covering them at job sites, in the vehicle, and in transit, which fixed-location property policies do not.
Does a tools floater cover equipment I rent?
It can, if you extend it to rented and leased equipment, but confirm that with your broker. A floater can typically be endorsed to cover damage to hired plant during the rental period, so you are not stuck paying the rental yard out of pocket. If you rent regularly, build it in rather than relying on the rental company's damage waiver, which is often expensive and narrow. Tell your broker how much you rent so the limit fits.
The honest bit
- Premiums and available limits vary by trade and how much gear you carry, so get a quote rather than trust a ballpark. An equipment-heavy trade pays far more than a painter.
- The locked-vehicle wording is common but not identical across carriers, so read your actual endorsement to see exactly what triggers the exclusion.
- Where this policy sits among the others you need is in What insurance do I actually need as a contractor?. The other ways a live policy still fails to pay are in The insurance mistakes that void your coverage, and getting the limits and premium right is in How much insurance do I need, and how do I cut the premium?.
- This is general guidance, not insurance advice. Route any state-specific requirement to Working in Your State.
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