Tools and equipment are where contractors have real money on the ground, and where many assume they are covered when they are not. A general liability policy pays for injury and damage you cause to others. It does not pay to replace your stolen generator. That coverage lives under inland marine, and how it is written decides whether a loss is actually paid. The honest review is that the coverage works well when it matches how you equip your crews and leaves gaps when it does not.
Where equipment coverage lives
Inland marine is the line built for property that moves, which is exactly what contractor equipment does as it travels between jobsites and sits on trailers. A contractors equipment floater, sometimes called a tools and equipment policy, is the usual home for this coverage. Because it is a separate structure from your liability and often from your business property, it is easy to overlook until a loss reveals it was never set up to match the work.
Scheduled versus blanket
The two main structures suit different equipment. A scheduled floater lists specific items, often by description or serial number, and covers those named pieces. That fits a handful of high-value machines you can identify and value precisely. A blanket floater covers a category of equipment up to a limit without naming each piece, which fits the many smaller tools that come and go, get replaced, and are impractical to list. Most contractors need some of both, a schedule for the big machines and an adequate blanket limit for the everyday tools.
The small tools gap
The most common gap appears when a policy schedules only the large equipment and leaves little or no blanket limit for small tools. Small tools are exactly what tends to walk off a jobsite, and a truckload of them can add up to real money. If the coverage names three machines and stops, the stolen tool bags are not paid. Matching a realistic blanket limit to what your crews actually carry closes a gap that scheduling alone cannot.
Rented and leased equipment
Rented or leased equipment is its own question, and a frequent surprise. It can need dedicated coverage, sometimes called rented or leased equipment coverage, and the rental agreement may make you responsible for damage regardless of what you assumed. Many contractors believe the rental company or their own floater has it handled, and neither does. If your jobs involve rented machines, confirming how they are covered before the equipment shows up is cheaper than learning at a claim.
Other quiet gaps
A few more recur. Borrowed equipment and employee-owned tools may fall outside a policy written only for owned property. Limits set years ago may no longer replace what you now run. And storage or transit conditions in the policy can affect a loss that happens off a jobsite. None of these are exotic. They come from coverage that was bought once and never matched to how the equipment actually grew and moved.
Questions to ask your advisor
- Are my small tools covered by an adequate blanket limit, not just a schedule?
- Is my rented or leased equipment covered, and by whose policy?
- Do my limits reflect what it would actually cost to replace my equipment today?
- Are borrowed or employee-owned tools inside or outside my coverage?
- Where does my coverage apply, on the jobsite, in transit, and in storage?
Equipment and inland marine coverage is not complicated, but it rewards matching the structure to the real work. The honest read is that the gaps are predictable, small tools, rented gear, low limits, and they trace back to coverage that was never fitted to how the contractor equips the job. Fit the coverage to the equipment, and the floater does its job.
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