Commercial Auto Insurance
Commercial Auto Insurance for Installation Businesses
In the installation trade, your tools and equipment are essential to completing each job. Whether you’re installing flooring, HVAC systems, solar panels, or alarm systems, your business depends on having dependable gear. If tools are stolen, damaged, or wrecked in transit, without proper insurance the cost to replace them can cripple your operations. That’s why Tools & Equipment Insurance is critical—it protects your investment and ensures your business keeps running even after a loss.
Unlike a general liability policy, which primarily covers third-party claims, a tools & equipment policy focuses on your own physical assets. It helps you recover financially from incidents like theft, vandalism, or accidental damage while your gear is on site or being transported. Many contractors refer to this form of coverage as “contractor equipment insurance” or “inland marine coverage.” According to insurance providers, “equipment insurance pays to repair or replace a contractor’s moveable tools and equipment if lost, damaged, or stolen.”
It is especially important in fields where tools move frequently—like cable installers, window installers, or solar technicians. Because your tools rarely stay in one place, standard commercial property insurance often excludes coverage while in transit or off premises. Tools & Equipment Insurance fills that gap. In fact, some insurers call attention to the fact that many contractors aren’t aware their tools aren’t covered by general liability or standard auto insurance.
What Coverage Typically Includes & Its Limits
Under a tools & equipment policy, you can expect coverage for hand tools, power tools, machines, and equipment that you regularly transport to job sites. It will protect against theft, vandalism, or accidental damage while your gear is stored, in transit, or at a worksite. For example, if a contractor’s drill is stolen from a van parked overnight, this coverage helps with replacement.
Some policies extend coverage to rented or borrowed equipment, which is helpful when you don’t always use your own tools for every job. So if you rent a machine for a one-off project, your tools policy may still protect that rental item. Many insurers describe this as an important feature for contractors.
However, there are exclusions and limits you need to know. Wear and tear, gradual deterioration, corrosion, or mechanical breakdown over time are typically not covered. Also, very high-value equipment may need to be “scheduled” (specifically listed) to get full coverage. Older tools—especially those beyond their expected useful life—often face reduced protection or may be excluded altogether.
Choosing the Right Tools & Equipment Policy
When selecting a policy, the first step is calculating the replacement value of your tools and equipment. Underinsuring will leave you with a significant out-of-pocket expense when a loss occurs. The value should reflect current market prices, not just what you originally paid. After establishing value, you must decide whether you want replacement cost coverage (which pays to replace with new items) or actual cash value (considering depreciation). Replacement cost is usually more desirable for installers.
Also important is ensuring coverage applies across locations – job sites, vehicles, storage facilities, and during transit. Because installation professionals often carry gear to multiple sites, you’ll want coverage that follows your tools rather than limiting them to a fixed address. Some policies require certain security measures (locks, alarms) when equipment is stored in vehicles or unattended areas.
Frequently Asked Questions
What exactly does a tools & equipment insurance policy cover?
It covers loss, theft, or damage of tools and equipment used in installation work while in transit, on work sites, or in storage, depending on the policy terms.
Are rented tools protected under my policy?
Many tools policies allow coverage for rented or borrowed equipment, but you need to confirm this with your provider.
Will my policy cover tools stolen from my vehicle?
Yes, many policies cover tools stolen from a vehicle, but often only if proper security measures (locked van, alarm) were in place.
Does normal wear and tear count as a covered loss?
No, gradual deterioration, normal wear, or mechanical breakdown is typically excluded under these policies.
Do old tools qualify for coverage?
Older or heavily depreciated tools may have reduced value or may be excluded entirely, depending on your insurer’s rules.