Tool & Equipment Floater

A tool and equipment floater is an inland marine policy that covers a contractor's hand tools, power tools, and smaller equipment against theft, loss, or damage anywhere they go — on the jobsite, inside the work truck, or in transit between locations. It exists to solve a fundamental limitation of the commercial property policy, which generally only covers property at a described premises. Since a contractor's tools live in vans and on jobsites rather than at the shop, the floater's "floating" (location-independent) coverage is what actually protects them.

This matters to a small contractor because tools are both essential and highly stealable, and a break-in can halt production overnight. The floater can be written two ways: smaller unscheduled tools are covered on a blanket basis up to a per-item and total limit, while larger, more valuable pieces are scheduled individually by serial number. Valuation is a critical choice — coverage on a replacement cost basis pays to buy new, whereas actual cash value deducts depreciation, which can leave a meaningful gap on older equipment. Rented, leased, and borrowed tools often need to be added by endorsement rather than assumed to be included.

A useful nuance is distinguishing the floater from adjacent inland-marine forms. A tool and equipment (or "contractors equipment") floater covers the contractor's own gear; an installation floater covers materials being installed into a project; and builders risk covers the structure under construction — three different exposures that are easy to confuse. When buying, match the blanket sublimit to the real value of what rides in each truck, mind the per-item cap, and confirm whether theft from an unattended vehicle is covered, since some policies require visible signs of forced entry.