Property & equipment

Contractors Equipment Insurance

Insurance for damage to or theft of the machinery and equipment your business owns, leases or rents, on the job, in the yard and in transit.

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Contractors equipment insurance, often called a contractors equipment floater, is a type of inland marine policy for mobile equipment: excavators, skid steers, loaders, lifts, compressors, generators and similar machinery. It can pay to repair or replace equipment damaged by theft, fire, vandalism, collision, overturn and other causes the policy includes.

General liability and auto policies typically don't pay for damage to your own equipment, and a property policy usually focuses on your building and its contents. A separate equipment floater is the usual way to protect the machines your work depends on.

Policies can include equipment you own, equipment you lease long term and equipment you rent for a single job. How you list it, the values you report and whether rented equipment is included all make a big difference after a loss. We'll go through your equipment list with you, including what you rent.

What's typically included

Exact coverage depends on the policy form, endorsements and insurance company.

Scheduled equipment

Each larger piece is listed with its year, make, model, serial number and a value you report, and the limit applies per item. Listing a machine doesn't make its limit adequate, so update values when they change.

Blanket coverage

Smaller items are grouped under one blanket limit with a maximum per item, so you don't have to list every tool. Ask what the per-item cap is.

Leased and rented equipment

Can extend to equipment you lease or rent from others. Rental contracts often hold you responsible for the full value, and the rental company's damage waiver is a separate charge.

Rental reimbursement

If your own equipment is damaged by a loss the policy includes, rental reimbursement can pay to rent a substitute so the job keeps moving, subject to a waiting period and daily and total limits.

Newly acquired equipment

Many forms extend temporary coverage to newly purchased equipment for a set number of days, up to a limit, as long as you report it within that window.

Valuation options

Equipment can be valued at actual cash value (with depreciation), replacement cost or, on some policies, stated value. On some forms a stated value is a maximum rather than a set payout, so ask how a claim would be settled.

Loss payee and lender endorsements

Lenders and lessors are typically listed as loss payees, and they may require specific deductibles or proof of coverage before releasing equipment.

What to watch for

Rented equipment left off the policy. If only owned equipment is listed, a loss to a rented excavator may fall entirely on you under the rental contract.
Outdated schedules and values. Equipment bought, sold or traded without an update can leave gaps, and values set too low can reduce a claim payment, especially on forms with a coinsurance condition.
Blanket per-item limits. A blanket limit usually caps any single item, so a higher-value piece may need to be scheduled separately.
Theft conditions. Theft from job sites is a common equipment loss, and some policies require security measures such as fencing, locked storage or GPS tracking.
Breakdown and wear exclusions. Mechanical breakdown, wear and tear and gradual deterioration are commonly excluded unless an endorsement adds breakdown coverage.
Licensed vehicles. Dump trucks and other road-licensed vehicles generally belong on the auto policy, while mounted equipment may belong on the floater, so the split needs care.

What affects price and eligibility

Types, ages and values of the equipment
Valuation chosen: actual cash value, replacement cost or stated value
Where equipment is stored overnight and what security is in place
How much equipment you rent and typical rental values
Loss history, especially theft
Deductible selected

Helpful information for a quote

Have what you can — we'll ask for anything else an insurance company needs. Starting a new business? You can begin without prior policies or loss runs.

Equipment list with year, make, model, serial number and current value for each larger item
Total value of small tools and items under the scheduling threshold
Annual equipment rental costs and the most valuable piece you typically rent
Lender or lessor names and addresses for loss payee endorsements
Storage locations and security measures such as fencing, locked yards or GPS
Loss runs (claims history reports) for the last 3–5 years, if you've been insured before

Written by ALP Insurance

Who typically needs it

General contractors and site work contractors with heavy equipment
Excavation, paving and landscaping companies
Contractors who rent equipment job by job from rental yards
Businesses financing or leasing equipment where the lender requires coverage
Snow removal and tree service companies with specialized machinery
Trades using lifts, scaffolding, generators and compressors

Talk it through with an agent

Not sure what you need? Start a request and choose "Not sure" — a licensed ALP agent will talk through the options with you.

Request a contractors equipment quote

Industry guides

Contractors Equipment FAQs

Do I need to schedule every piece of equipment?

Usually only the higher-value items. Smaller tools and equipment can often go under a blanket limit, as long as no single item exceeds the per-item maximum.

What value should I report for scheduled equipment?

Use a current value that matches how your policy settles claims, such as actual cash value or replacement cost, and update it when you buy, sell or upgrade equipment. If a value is too low, a total loss may be paid only up to that amount, and on forms with coinsurance a partial loss can be reduced too.

Should I buy the rental company's damage waiver?

It depends on how often you rent and what your policy includes. If your equipment floater extends to rented equipment at an adequate limit, the waiver may duplicate it, so compare the rental contract with your policy first.

What is rental reimbursement on an equipment policy?

It can pay to rent substitute equipment while your own damaged machine is repaired or replaced, subject to a waiting period, a daily limit and a total limit.

Is a dump truck equipment or an auto?

A vehicle licensed and driven on public roads generally goes on the commercial auto policy. Unlicensed machines and some mounted equipment are usually written on the equipment floater, and we can help draw that line for your fleet.

Does contractors equipment insurance include mechanical breakdown?

Generally not on its own. Breakdown, wear and tear and gradual deterioration are typically excluded, though some policies offer a breakdown endorsement.