Inland Marine Insurance and Coverage for Tools & Equipment

Imagine you’re transporting expensive tools or equipment to a job site, and they get damaged, stolen, or lost along the way. Or maybe you leave them on-site overnight, only to return the next morning and find them gone. With inland marine insurance premiums rising by 14.9% in 2022, totalling $29.82 billion, it's clear that more businesses are recognizing the importance of protecting mobile assets. 

If your business relies on tools, materials, or mobile equipment. In that case, you need inland marine insurance to safeguard them—because standard business policies won’t always cover losses that occur in transit or at job sites.

So, how does inland marine insurance compare to general liability coverage? Let’s break it down so you can understand how to best protect your equipment and your business.

What is Inland Marine Insurance?

Inland marine insurance is designed to cover property that moves from one location to another. While general liability and property insurance protect fixed locations, inland marine insurance ensures that your tools, equipment, and materials are protected wherever they go.

This type of policy is particularly useful for contractors, construction companies, and service providers who frequently transport valuable tools or equipment to various job sites.

What Does Inland Marine Insurance Cover?

• Protection for tools and equipment – This coverage ensures that tools, machinery, and equipment used for business operations are protected against theft, vandalism, and accidental damage while in transit, storage, or at a job site.
  
  Example: A contractor leaves a set of expensive power tools on-site overnight. The next morning, they discover the tools were stolen. Inland marine insurance would cover the replacement cost, ensuring the contractor isn’t left paying out of pocket.

• Coverage for Materials in Transit: Materials being transported between locations are vulnerable to accidents, theft, and damage. Inland marine insurance protects construction materials, inventory, and supplies while they are being moved.
  
  Example: A trucking company is delivering roofing materials to a construction site, but a sudden storm damages part of the shipment. With inland marine coverage, the business can claim reimbursement for the damaged materials, avoiding costly setbacks.

• Equipment Breakdown Coverage This part of the policy covers sudden and accidental equipment failures due to covered damages, ensuring businesses don’t suffer costly downtime.
  
  Example: A landscaper’s industrial-grade mower breaks down while being transported between job sites due to mechanical failure. Inland marine insurance covers repair or replacement costs, keeping the business running smoothly.

• Job Site Coverage: Equipment and materials stored at temporary job sites are protected from theft, fire, weather-related damage, or accidental loss.
  
  Example: A plumbing company stores pipes and fittings at a job site, but a fire breaks out, destroying the materials. Inland marine insurance covers the replacement cost, ensuring the project continues without major financial loss.

• Installation Floater Coverage: Covers materials that are in the process of being installed or those that have been installed but aren’t yet operational.
  
  Example: An HVAC contractor installs air conditioning units at a commercial property, but before the system is activated, it gets damaged due to a power surge. Installation floater coverage helps cover repair or replacement costs.

• Bailee’s Coverage: If your business handles or stores property owned by others, this coverage protects against damage or loss while those items are in your care, custody, or control.
  
  Example: A repair shop is fixing a client’s industrial generator, but a break-in results in the generator being stolen. Bailee’s coverage ensures the business can compensate the client without suffering financial loss.

What Inland Marine Insurance Doesn’t Cover?

• Standard business property at fixed locations – Inland marine insurance is designed for mobile equipment and doesn’t cover items stored at a fixed business location (covered under commercial property insurance).
• Wear and tear or equipment malfunctions – Does not cover damage due to regular wear and tear, mechanical breakdowns, or improper maintenance.
• Intentional damage or employee theft – Losses caused by fraud, intentional acts, or employee dishonesty are typically excluded.
• Vehicles and licensed equipment – Vehicles must be covered under commercial auto insurance, not inland marine policies.
• Acts of war or government seizure – Excludes damages caused by war, government action, or confiscation.

Understanding what is and isn’t covered can help ensure you have the right insurance policies in place to fully protect your business assets.

Types of Inland Marine Policies Relevant to Tools & Equipment

Inland marine insurance includes several specialized policies designed to protect tools, equipment, and materials that move between locations. Whether you’re a contractor, electrician, plumber, or landscaper, choosing the right policy ensures that your valuable assets are covered against theft, damage, and transit-related risks. Below are the key inland marine policies relevant to tools and equipment.

1. Contractor’s Tools and Equipment Coverage

• What is it?
  This policy protects small tools and portable equipment that are frequently transported between job sites. It covers loss, theft, and accidental damage to essential work tools.
• How it works:
  If your tools are stolen from a job site, damaged in transit, or lost due to fire or vandalism, this coverage helps repair or replace them.
• Example:
  A roofing contractor’s power drills, saws, and toolboxes are stolen from a locked truck overnight. This policy covers the cost of replacing the stolen equipment.

2. Installation Floater Coverage

• What is it?
  This policy covers materials, supplies, and equipment awaiting installation at a job site. It ensures financial protection in case of damage, theft, or loss before installation is completed.
• How it works:
  If building materials or equipment are damaged by fire, vandalism, or severe weather before being installed, the policy covers replacement costs.
• Example:
  A contractor delivers HVAC systems to a commercial building project, but before installation begins, a fire destroys them. This policy covers the cost of replacing the equipment.

3. Equipment Floater Coverage

• What is it?
  Designed for larger, high-value equipment such as generators, compressors, and specialized construction tools that move between multiple locations.
• How it works:
  It provides coverage if equipment is stolen, damaged in transit, or accidentally broken during operations.
• Example:
  A landscaper’s commercial-grade lawnmower falls off a trailer while being transported to a client’s property, causing significant damage. This policy covers repair or replacement costs.

4. Bailee’s Coverage

• What is it?
  This policy protects items that belong to a client or third party but are in your care, custody, or control for a job.
• How it works:
  If a contractor is responsible for repairing or storing a customer’s property, this policy ensures coverage if that item is lost, stolen, or damaged while in possession.
• Example:
  A repair shop stores a customer’s heavy-duty drill machine for maintenance, but a break-in results in theft. This policy covers the cost of compensating the customer for the loss.

5. Storage and Transit Coverage

• What is it?
  This policy covers tools and equipment stored at a temporary location or being transported between sites.
• How it works:
  If stored equipment is damaged by fire, flooding, or vandalism, or if it’s stolen in transit, this policy provides financial protection.
• Example:
  A contractor stores scaffolding and power tools in a rental storage unit, but a storm floods the facility, damaging the equipment. This policy helps cover replacement costs.

For contractors and business owners who depend on tools and equipment, standard business insurance doesn’t offer complete coverage for mobile property.

Now that we've explored the different types of coverage let’s take a closer look at how inland marine insurance compares to other policies.

Comparing Inland Marine, General Liability, and Mobile Equipment Insurance

Contractors and businesses that own and transport tools, equipment, and machinery need the right insurance policies to cover different risks. Below is a comparison of inland marine insurance, general liability insurance, and mobile equipment insurance, explaining what each policy covers and when it’s needed.

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Where These Policies Overlap

While each policy serves a different purpose, there are some areas where coverage overlaps, depending on the type of claim and how the loss occurs.

• Inland Marine & General Liability Insurance → A contractor's tools may be damaged while working on a client’s property. Inland marine covers the tools, while general liability covers the damage to the client’s property.
• Inland Marine & Mobile Equipment Insurance → If a contractor transports a mix of tools and heavy machinery, inland marine covers small equipment, while mobile equipment insurance covers large machines like bulldozers and cranes.
• General Liability & Mobile Equipment Insurance → If a contractor's heavy equipment accidentally damages a third party’s property, mobile equipment insurance covers the machine, while general liability insurance covers the third-party property damage.

Which Insurance Policy Do You Need?

• If you transport tools, materials, or small equipment between job sites → Get Inland Marine Insurance.
• If you want liability protection for third-party injuries or damages → Get General Liability Insurance.
• If you operate large, heavy-duty construction equipment → Get Mobile Equipment Insurance.

For full protection, many contractors combine inland marine insurance with general liability coverage to ensure both business assets and liability risks are covered. If you’re unsure which coverage fits your needs, consulting an insurance expert like TWFG Khan Insurance can help tailor a policy that best protects your business assets.

How Much Does Inland Marine Policy Coverage Cost?

The cost of inland marine insurance varies based on several factors, including the value of the insured equipment, industry risk, and coverage limits. Contractors, service providers, and businesses that frequently transport tools and materials should understand these cost factors to budget effectively and secure the right level of protection.

Typical Cost Range for Inland Marine Insurance

The best way to get an accurate estimate is to request a customized quote from an insurance provider based on your specific tools, equipment, and business operations.

Here’s a table for the typical cost range of Inland Marine Insurance based on business size and equipment type:

The actual cost will vary depending on coverage limits, deductible choices, and industry-specific risks. To get a more accurate estimate, it's best to request a customized quote from us based on your business's needs.

Factors That Affect Inland Marine Insurance Costs

• Value of Insured Equipment – Higher-value tools, machinery, and materials lead to higher premiums due to the increased replacement cost.
• Industry and Risk Exposure – Businesses in construction, electrical work, or HVAC face greater risks of theft and damage, which can increase insurance costs.
• Coverage Limits – Policies with higher limits provide greater protection but come with higher monthly or annual premiums.
• Deductible Amount – Choosing a higher deductible can lower your premium but increases out-of-pocket costs in case of a claim.
• Storage and Security Measures – Businesses with secured storage units, tracking systems, or theft-prevention measures may qualify for lower premiums.
• Frequency of Transport – The more often tools and equipment are moved between job sites, the higher the risk, which might result in higher insurance costs.

Also, check out our guide on Understanding Inland Marine and Marine Cargo Insurance Policies.

Who Needs Inland Marine Policy Insurance?

Any business that frequently moves tools, equipment, or materials between locations should consider inland marine insurance. Unlike standard property insurance, which only covers assets at a fixed location, inland marine insurance protects valuable business assets while in transit or stored at job sites.

Industries That Benefit from Inland Marine Insurance

• Construction Contractors – Covers tools, machinery, and building materials transported between job sites.
• Electricians & Plumbers – Protects specialized tools and equipment frequently moved between service locations.
• HVAC & Mechanical Service Providers – Ensures high-value HVAC systems and repair equipment are covered before installation.
• Landscapers & Lawn Care Businesses – Covers commercial mowers, trimmers, and irrigation equipment stored on trucks or at job sites.
• Transport & Logistics Companies – Protects client goods, inventory, and equipment while in transit.
• Retailers & Wholesalers – Covers inventory and supplies that are being shipped between warehouses and stores.
• Photography & Film Production Crews – Protects high-end cameras, lighting, and production equipment during transport and on location.
• Healthcare Providers (Mobile Clinics & Labs) – Covers medical equipment used at temporary locations or transported for mobile services.

If your business relies on mobile equipment or frequently moves high-value assets, inland marine insurance is essential for protecting against unexpected losses from theft, damage, and transit-related incidents. To ensure you’re fully covered, explore our guide, Understanding Theft Coverage in Business Insurance.

And to avoid such circumstances TWFG Khan Insurance is here to help you and keep your business secured.

Protect Your Tools & Equipment with TWFG Khan Insurance

Your tools and equipment are essential to your business—whether on a job site, transporting materials, or storing valuable assets. But what happens if they get stolen, lost, or damaged? Standard business insurance won’t always cover these risks, so inland marine insurance is essential for contractors, tradesmen, and businesses that rely on mobile equipment.

Why Choose TWFG Khan Insurance for Inland Marine Coverage?

• Comprehensive Protection – Covers tools, equipment, and materials in transit, on-site, or in temporary storage.
• Customized Policies – Tailored coverage based on your industry, risk level, and specific business needs.
• Protection from Theft & Damage – Financial security against unexpected losses that could disrupt your work.
• Fast & Reliable Claims Support – 24/7 assistance to help you get back to work quickly after a loss.
• Competitive Pricing – Affordable coverage without unnecessary costs or hidden fees.

Secure Your Equipment, Secure Your Business

TWFG Khan Insurance specializes in inland marine insurance for contractors, service providers, and business owners. Whether you’re protecting power tools, specialized equipment, or high-value machinery, we’ll help you find the right coverage to keep your business moving forward.

Don’t wait until an unexpected loss disrupts your operations. Get a customized quote today and protect what matters most!