Tools & Equipment Insurance (Inland Marine): What It Really Covers
Mr. Hoots breaks down tools & equipment insurance for contractors. What’s covered, what isn’t, how to set limits, and how to speed up theft claims.
Hoo’s there? Mr. Hoots. If your livelihood rides in the truck or sits in a job box, Tools & Equipment Insurance (aka Inland Marine) is your best friend. Let’s translate the fine print into job-site English.
What is Tools & Equipment Insurance?
It covers your gear, from hand tools to portable equipment, on the truck, in transit, or on site. Think theft, fire, vandalism, and some accidental damage. It’s the missing piece your General Liability doesn’t touch.
Good for: plumbers, sparkies, painters, landscapers, handypeople, anyone who works mobile.
What’s typically covered
- Theft of tools or gear from your truck, job box, or trailer
- Fire, wind, vandalism and certain accidental damage
- Borrowed or rented equipment (add a limit; some policies include it)
- Employee tools (set a per-person sublimit if needed)
- Newly purchased gear (often a temporary automatic amount)
- Hoot tip: Ask for worldwide coverage if you cross the border or fly with tools.
What’s usually not covered
- Wear and tear, rust, and mechanical breakdown
- Unexplained disappearance (no evidence of theft)
- Tools permanently kept at a fixed shop location without adding that premise
- Non-portable heavy equipment (that may need a separate equipment floater)
- Theft from an unlocked vehicle or unattended site (varies by policy)
Replacement Cost vs. Actual Cash Value
- Replacement Cost (RC): Pays what it costs to buy a new equivalent today.
Actual Cash Value (ACV): Depreciates your old gear. Cheaper premium, smaller check.
Mr. Hoots’ rule: If tools are how you eat, choose Replacement Cost.
Picking the right limits (no guesswork)
- Make a list (or export your purchase history): item, brand/model, serial #, price
- Set a Blanket Limit equal to the total value you carry most days
- Schedule any high-value items (e.g., camera/diagnostic gear, laser levels)
- Add Rented/Leased Equipment if you rent lifts, trenchers, or mixers
- Choose a deductible that won’t ruin your day (common: $250 – $1,000)
Quick math: If you carry ~$18,000 of tools to most jobs, set a $20k blanket plus a scheduled line for the $4k camera snake.
Common claims & how to speed them up
Scenario 1: Truck break-in overnight
- File a police report, take photos of damage, list stolen items with serials
- Save repair invoices for the door/window
Scenario 2: Job box cleaned out
- Report to GC/site security + police; collect camera footage if available
- Provide purchase docs and your tool list
Scenario 3: Saw kicked off a scaffold
- Photos of the scene, witness statements, model/serial, and repair/replacement estimate
Proof wins: Serial numbers + receipts = faster claim, bigger check.
Borrowed, employee, and rented gear
- Borrowed: Many policies cover it, but set a limit and keep written permission
- Employee tools: Add a per-employee sublimit (e.g., $1k – $2.5k each)
- Rented/Leased: Add a separate rented equipment limit to match rental contracts
Simple security playbook (reduces claims & premiums)
- Lock the truck. Lock the job box. Add a hitch & coupler lock on trailers
- Park under lights, back the trailer to a wall, keep serials in your phone
- Etch or engrave business info; use AirTag/Tile on big-ticket items
- Post a “Video Surveillance” decal near storage
Add it to your policy (what I need from you)
- Your trade + typical gear you carry
- Total value (blanket) + any scheduled items over your threshold
- Storage info (shop address, vehicle/trailer details)
- Rented equipment? Send the rental agreement limit/terms
Mr. Hoots’ Bottom Line
General Liability protects others. Tools & Equipment protects your stuff and keeps you working tomorrow. Give me your list and I’ll hoot back a quote with Replacement Cost and the right limits.