Tool & Equipment Floater
Also known as: Contractors Equipment Floater, Tool Floater, Small Tools 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.
Real-world scenario
Summit Ridge Electric, a 6-electrician contractor in Boise, carries a Tool & Equipment Floater as part of its inland marine program to protect the gear that travels between jobsites. The policy schedules items over $2,500 individually — a $9,800 cable-pulling tractor, a $6,400 hydraulic crimper, and a $3,200 thermal imaging camera — while a $15,000 blanket limit covers the fleet of hand tools, drills, and meters that are too numerous to list. The annual premium runs $1,850, with a $500 per-loss deductible and coverage written on a replacement cost basis rather than depreciated value.
On a Tuesday, a locked job trailer is broken into overnight and $22,400 of equipment is stolen: the crimper, the imaging camera, and roughly $12,800 of blanket-limit hand tools. Summit Ridge files a claim. Because the scheduled crimper ($6,400) and camera ($3,200) are itemized, they pay in full to their listed values, and the $12,800 hand-tool loss falls under the $15,000 blanket limit. The insurer issues $22,400 minus the single $500 deductible, for a net payout of $21,900. Had the policy been written on actual cash value, depreciation on the 4-year-old crimper alone could have cut roughly $2,600 from the check.
The owner replaces the gear within eight days and keeps the $600,000-revenue job on schedule. Against a $1,850 premium, the floater returned $21,900 on a single event — and avoided the alternative of paying $22,400 out of pocket or halting the crew.
How it affects your premium
Tool & Equipment Floater pricing is driven by what you own, where it goes, and how you store it. The main cost drivers underwriters weigh:
- Total insured value of scheduled and blanket items — the combined limit for high-value scheduled equipment plus the blanket small-tools limit is the single biggest rating factor.
- Age and type of equipment — newer, higher-theft-target power tools and specialized diagnostic gear rate higher than basic hand tools.
- Deductible amount — choosing a $1,000 deductible instead of $250 lowers premium but shifts more small losses to you.
- Valuation basis — replacement cost settlement costs more than depreciated actual cash value but pays far more at claim time.
- Storage and security — locked, alarmed trailers and secured yards reduce theft exposure and premium versus tools left in open truck beds.
- Loss history — prior theft or damage claims on your loss run push rates up and can trigger higher deductibles.
- Coverage territory and job radius — how far and how often equipment travels affects the transit-and-jobsite exposure being priced.
Common misconceptions
Myth: My general liability policy already covers my stolen tools.
Reality:
General liability pays for third-party bodily injury and property damage you cause — it does not cover your own tools that are lost, stolen, or damaged. That is exactly the gap a Tool & Equipment Floater fills.
Myth: A tool floater covers any piece of equipment I own, no matter the value.
Reality:
Most policies cap the blanket limit per item (often $1,000–$2,500) and require higher-value pieces to be individually listed as scheduled coverage; an unscheduled $9,000 machine may only pay up to the per-item sublimit.
Myth: Tools I rent or borrow are covered the same as gear I own.
Reality:
Equipment you lease, rent, or borrow is often excluded or sublimited unless specifically added; borrowed equipment usually needs a separate installation floater or a rented-equipment endorsement.
Frequently asked questions
What's the difference between a tool floater and an inland marine policy?
A Tool & Equipment Floater is a type of inland marine coverage — inland marine is the broad category for mobile property, and the tool floater is the specific form that insures a contractor's tools and equipment on the move.
Does a tool floater cover equipment stolen from my truck?
Yes. Because tools are covered on and off any jobsite and in transit, theft from a locked vehicle or trailer is typically covered, subject to your deductible and any security requirements in the policy.
Should I schedule my tools or use a blanket limit?
Use a blanket limit for the large volume of low-value hand tools, and individually schedule any single item worth more than the per-item cap (often $2,500) so it pays to its full value at claim time.
Is a tool floater the same as coverage for equipment I install at a customer's site?
No. A tool floater covers gear you own and use; materials and equipment you are installing into a customer's project are covered by an installation floater instead.
Does the floater pay replacement cost or depreciated value?
It depends on how the policy is written. A replacement cost floater pays to buy new equivalents, while an actual cash value policy subtracts depreciation, which can meaningfully reduce older-tool payouts.
Sources cited
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