What does tools and equipment insurance cover?

It covers the tools, machinery and portable equipment your business owns, rents or borrows, wherever they are: on job sites, in vehicles, in transit or in storage. Most contractor's floaters are written on an all risks basis against theft, fire, vandalism, collision and other physical damage, with big items scheduled and small tools on a blanket limit.

Are my tools covered when they're stolen from my truck overnight?

Only if the floater's vehicle condition is met. Many Canadian wordings cover theft from an unattended vehicle only when the tools were in a fully enclosed, locked metal body or compartment and there is visible evidence of forced entry. An open pickup box or an unlocked van may not qualify, so match the wording to how your crew works.

Should I schedule my equipment or use a blanket limit?

Use both. Schedule heavy equipment and any tool worth more than the blanket's per-item cap, with serial numbers and current values. Insure everyday hand and power tools on a blanket limit. Some tool floaters cap any one unscheduled tool at $1,000, so an expensive laser or camera left off the schedule can be badly underpaid.

Is rented equipment covered by my floater?

It can be, through a property of others or rented equipment limit for gear you are legally responsible for. Most rental contracts make you liable for loss or damage and require proof of insurance. Set the limit to your largest typical rental, and schedule long-term leased machines individually with the lessor named as loss payee.

Will I get replacement cost or actual cash value?

Many floaters settle at actual cash value, which is replacement cost less depreciation, unless you buy a replacement cost extension. Even then, some wordings apply replacement cost only to items under three years old, and only once you actually replace them. Older tools are usually paid at depreciated value, so check the valuation clause.

Does my commercial property policy cover my tools?

Usually only at the premises named on the policy, sometimes with a small off-premises extension. Tools in vehicles, on job sites or in transit generally need a contractor's equipment or tool floater. Licensed vehicles themselves need commercial auto, and materials being built into a project need builder's risk or an installation floater.

Is mechanical breakdown covered?

Not by most floaters, which exclude mechanical and electrical breakdown, wear and tear and gradual deterioration. Damage caused by an insured peril such as fire, collision or overturn is covered. Sudden breakdown of engines, hydraulics or electronics needs equipment breakdown coverage, or a breakdown extension on the floater where the insurer offers one.

What happens when I buy new equipment mid-term?

Most floaters cover newly acquired equipment of a similar kind automatically, but only for a limited time and up to a set limit. One published Canadian form covers new items for 90 days, to $50,000 per loss if no other limit is shown, and then stops covering them unless they have been reported to the insurer.

How much does tools and equipment insurance cost?

Premiums are a rate per $100 of insured value, set by the type and value of the equipment, where it is stored, security measures such as GPS and locked storage, your trade, your deductible and valuation basis, and your theft history. A detailed schedule and documented security usually earn better terms than a single round-number limit.

Tools & Equipment Insurance

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In short

Tools and equipment insurance, usually written as a contractor's equipment floater, covers the tools, machinery and portable equipment a business owns, rents or borrows wherever they are: on job sites, in vehicles, in transit or in storage. It is typically written on an all risks basis against theft, fire, vandalism, collision and other physical damage, with big items scheduled individually and small tools insured on a blanket limit.

Last reviewed October 26, 2026

Heavy equipment stolen in Canada, 2019 to 2023 (Équité Association): $124.6M; Heavy equipment stolen in Canada, 2019 to 2023 (Équité Association)
Approximate share of stolen heavy equipment recovered (Équité Association): 24%; Approximate share of stolen heavy equipment recovered (Équité Association)
Window to report newly bought equipment in one Canadian specimen floater: 90 days; Window to report newly bought equipment in one Canadian specimen floater
Canadian insurers we compare for contractors' equipment: 17; Canadian insurers we compare for contractors' equipment

Tools and equipment live in vans, trailers, yards and job sites, which is exactly where a standard commercial property policy stops covering them. A contractor's equipment floater follows them, on an all risks basis, against theft, fire, vandalism, collision and other physical damage, whether you own, lease, rent or borrow them.

Most tool claims that go wrong fail on structure, not bad luck: a blanket limit with a per-item cap below the tool that was stolen, actual cash value settlement on old gear, or a locked vehicle condition the crew never knew about. We build your floater from a real inventory, schedule the machines that matter, and match the conditions to how you work. Contractors can see the rest of their program in our construction and contractor insurance guide.

What's covered

Owned tools and equipment on site, in vehicles, in transit and in storage
Scheduled heavy equipment with individual limits
Blanket limits for small hand and power tools
Rented, leased and borrowed equipment you are responsible for
Newly acquired equipment, covered automatically for a set period
Rental reimbursement while an insured machine is repaired
Theft from locked vehicles, subject to the policy's security conditions

What tools and equipment insurance covers

A commercial property policy insures contents at the premises named on the policy. Tools and equipment spend most of their working lives somewhere else, so they need an inland marine floater that follows them.

Owned tools and equipment: hand and power tools, generators, compressors, lasers and survey instruments, scaffolding, trailers' contents and mobile machinery.
Heavy equipment: excavators, skid steers, loaders, lifts and similar unlicensed machines, scheduled one by one.
Property of others: rented, leased or borrowed equipment you are legally responsible for.
Newly acquired equipment: similar items bought during the term, usually covered automatically for a limited time.
Rental reimbursement: the cost of renting a replacement while an insured machine is repaired, where the floater includes it.
Employees' tools, where the policy extends to them.

Licensed vehicles go on commercial auto. Materials that will become part of a building go on builder's risk or an installation floater.

Who needs a tools and equipment floater

General contractors, trades and renovators, whose tools travel daily between vans, sites and storage. Our construction and contractor insurance guide covers the rest of their program.
Excavation, landscaping and snow removal contractors with machinery parked on sites and lots overnight.
Plumbers, electricians and HVAC technicians who carry high-value tools and diagnostic equipment in service vehicles.
Carpenters and roofers with compact, easily stolen gear.
Photographers, AV crews and other businesses whose working equipment leaves the premises.
Contractors working under CCDC contracts. CCDC 41 (2020) requires all risks contractors' equipment insurance that doesn't allow the insurer to subrogate against the owner, unless the owner accepts proof the contractor can self-insure.

Scheduled vs. blanket: how to structure the limit

A floater combines two ways of insuring equipment, and getting the split right is most of the job.

How scheduled and blanket limits work on a contractor's floater
Structure	How it works	Example from published Canadian forms	Best for
Scheduled items	Each item is listed with a description, serial number and its own limit	The limit opposite each scheduled item is the most payable for it	Heavy equipment and any tool worth more than the blanket's per-item cap
Blanket (unscheduled) tools	One limit for all small tools, with a cap on any one item	One tool floater caps any one tool or set at $1,000	Hand and power tools you can't practically list
Property of others blanket	One limit for rented, leased or borrowed equipment	One contractors' form pays up to $25,000 for any one item unless it is scheduled	Regular short-term rentals
Newly acquired equipment	Automatic cover for similar items bought mid-term	One form covers them for 90 days, to $50,000 per loss if no other limit is shown, then stops unless reported	Growing businesses buying equipment during the year
Catastrophe limit	The most payable for all items in one event	Applies to a single event such as a yard fire or one theft	Contractors who store everything at one yard

The usual mistake is a blanket limit that hasn't grown with the business, or a $3,000 laser level sitting under a $1,000 per-item cap. An inventory with photos, serial numbers and replacement costs fixes both, and it makes a claim much faster.

How the policy works: perils, valuation and coinsurance

Floaters are less standardized than property policies, so the wording matters. The published Canadian specimens we reviewed show the mechanics to check.

Perils: both forms insure all risks of direct physical loss or damage, except what is excluded.
Valuation: the default settlement is actual cash value, meaning replacement cost less depreciation. One form also limits payment to the cost of replacing with used, substantially identical equipment if that is lower.
Replacement cost: available by extension, but one form applies it only to items less than three years old, and only once the item is actually replaced.
Coinsurance: often applied separately to each scheduled item. If an item is insured below the required percentage of its value, the claim is reduced in proportion. One form applies the penalty only when a loss exceeds the lesser of 5% of the amount insured or $10,000.
Deductible: a flat amount or a percentage of the item's insured amount, whichever is greater on some forms. If one event triggers several deductibles, typically only the largest applies.
Territory: one form covers equipment only within Canada unless endorsed. Work in the U.S. needs that extension, which our cross-border page covers.

Equipment values have moved with construction prices, which Statistics Canada measured at 3.5% higher year over year for non-residential building in the second quarter of 2026. A schedule set at purchase prices years ago can trigger coinsurance on exactly the machines that matter most.

Theft from vehicles and job sites: the conditions that decide claims

Most tool claims are thefts, and most disputed tool claims turn on a security condition. Both published Canadian forms we reviewed contain a locked vehicle warranty: the vehicle must have a fully enclosed metal body or compartment, and theft from an unattended vehicle is covered only after forcible entry, with visible evidence, into a locked body or compartment with its windows closed.

That wording has practical consequences. A pickup with an open box or soft tonneau cover may not qualify. Tools taken from an unlocked van, or with no sign of forced entry, may not be covered at all. One tool floater also excludes theft of property left unattended unless there was forcible entry into a locked building, room or locker, and excludes property at a location the insured knows has been vacant or shut down for more than 30 days.

Heavy equipment carries its own risk. Équité Association, the Canadian insurance industry's crime and fraud prevention body, reported that more than $124.6 million in heavy equipment was stolen in Canada from 2019 to 2023, and only about 24% was recovered. Edmonton, Calgary and Toronto were the top hot spots, and skid steers and mini excavators were the most stolen machines because they can be loaded onto a trailer in minutes.

Use lockable steel boxes or vans, and bring high-value tools inside overnight.
Fit GPS tracking and immobilizers to machines, and record serial and PIN numbers.
Fence, light and camera-monitor yards and sites, and park machines so they block each other.
Engrave or mark tools, and keep a dated photo inventory off site.

Rented, leased and borrowed equipment

Equipment rental contracts typically make the renter responsible for loss or damage from the moment the machine leaves the yard, and rental houses usually ask for proof of insurance before releasing it. A floater handles this in two ways: a property of others limit for equipment you rent or borrow and are legally liable for, or adding a long-term leased machine to the schedule with the lessor as loss payee.

Watch two edges. First, set the limit to your largest typical rental, not your average one, since a single lift or excavator can exceed a small blanket. Second, the reverse case is usually excluded: one form doesn't cover property you lease, rent or loan to others, so contractors who rent their own machines out need a separate rental equipment policy.

Rental reimbursement pays to rent a substitute while an insured machine is out of service. In one Canadian form it starts 72 hours after the loss and is limited to $2,500 per day and $10,000 per policy year unless higher limits are shown, and it doesn't pay if you have spare equipment you could use instead.

Common exclusions, and how to close the gaps

Typical tools and equipment floater exclusions and where the cover comes from
Excluded or limited	How to cover it
Mechanical or electrical breakdown	Equipment breakdown cover, or a breakdown extension on the floater where offered
Licensed road vehicles	Commercial auto or fleet physical damage
Theft by employees or others entrusted with the equipment	Commercial crime coverage
Mysterious disappearance or shortages found on inventory	Not insurable; managed with sign-out logs and regular counts
Loads above the machine's rated capacity	Not insurable; managed with operator training and load charts
Delay, loss of use or loss of market	Rental reimbursement cover, plus business interruption for your premises
Equipment rented or loaned to others	A separate rental equipment policy
Equipment underground, waterborne or used outside Canada	Specific endorsements, arranged before the work starts
Wear and tear, rust and gradual deterioration	Not insurable; managed through maintenance

Floater vs. property, auto and equipment breakdown

How a tools and equipment floater compares with the coverage it is most often confused with
	Equipment floater	Commercial property	Commercial auto	Equipment breakdown
What it insures	Tools and mobile equipment anywhere in the territory	Contents at named premises	Licensed vehicles	Sudden mechanical or electrical failure of equipment
Tools in a van at a job site	Yes, subject to the locked vehicle warranty	Usually not, or only to a small off-premises sublimit	No, auto covers the vehicle, not its contents	No
Theft from a job site	Yes, subject to security conditions	No	No	No
Engine or hydraulic failure	Usually excluded	Excluded	No	Yes, where the equipment is insured

Worked example: an overnight van break-in

A hypothetical electrical contractor has a floater with a $40,000 blanket limit for small tools, a $1,000 per-item cap, a $1,000 deductible and the standard locked vehicle warranty. Its scheduled items include a $6,500 cable puller.

Thieves pry open the locked rear door of a cube van parked overnight at an apprentice's home and take about $18,000 of tools, including the cable puller and a $2,400 thermal camera. The pry marks satisfy the forcible entry condition. The scheduled cable puller is paid up to its scheduled limit, on the policy's valuation basis. The thermal camera, which was never scheduled, is capped at $1,000 under the blanket. The rest of the hand and power tools are paid at actual cash value under the blanket, and one $1,000 deductible applies to the event.

If the same tools had been taken from an unlocked pickup with no sign of entry, the locked vehicle warranty could have defeated the whole claim. Two fixes cost little: schedule anything over the per-item cap, and match the vehicle condition to how the crew actually works.

What tools and equipment insurance costs

Floater premiums are a rate per $100 of insured value, applied to scheduled and blanket limits. Underwriters set the rate from:

Equipment type and value: heavy machinery, small tools and electronics carry different theft and damage risks.
Where it is kept: secure yard, locked building, enclosed vehicle or open site, and the theft experience of the area.
Security: GPS tracking, immobilizers, fencing, cameras and the vehicle security you can reliably maintain.
Trade and use: demolition and excavation equipment works in harsher conditions than an HVAC technician's tools.
Deductible, valuation basis and coinsurance percentage.
Claims history, particularly repeat theft.

The market is soft: Marsh's Global Insurance Market Index put overall Canadian commercial rates down 6% in the third quarter of 2026. A detailed schedule and documented security usually do more for the rate than any market cycle. Bundling the floater with your liability and auto can help too.

How we place tools and equipment insurance

Insurabiz is an independent brokerage that works only in business insurance. We build floaters from your real inventory and your real routine.

1Inventory: we list owned, leased and regularly rented equipment with serial numbers and current replacement costs.
2Structure: we decide what to schedule, what goes on the blanket, and the per-item cap you actually need.
3Conditions: we review where tools are stored overnight and how vehicles are secured, and look for wording that fits.
4Market: we approach the insurers on our panel of 17 whose appetite fits your trade and equipment.
5Compare: we weigh valuation, coinsurance, deductibles, rental and newly acquired limits, not just price.
6Maintain: we add new purchases within the reporting window and review the schedule each year.

If your tools or equipment are stolen or damaged

1Report theft to police right away and get the report number. Give them serial numbers and GPS data.
2Photograph forced entry marks on the vehicle, building or lock before anything is repaired.
3Notify your broker and insurer promptly, in writing.
4Pull your inventory: purchase receipts, serial numbers and photos for every item.
5Keep invoices for replacement rentals if you have rental reimbursement cover.

Our claims team works with you from first notice to settlement. Our guide to how a business insurance claim actually works explains each stage.

Good to know

Frequently asked questions

What does tools and equipment insurance cover?: It covers the tools, machinery and portable equipment your business owns, rents or borrows, wherever they are: on job sites, in vehicles, in transit or in storage. Most contractor's floaters are written on an all risks basis against theft, fire, vandalism, collision and other physical damage, with big items scheduled and small tools on a blanket limit.
Are my tools covered when they're stolen from my truck overnight?: Only if the floater's vehicle condition is met. Many Canadian wordings cover theft from an unattended vehicle only when the tools were in a fully enclosed, locked metal body or compartment and there is visible evidence of forced entry. An open pickup box or an unlocked van may not qualify, so match the wording to how your crew works.
Should I schedule my equipment or use a blanket limit?: Use both. Schedule heavy equipment and any tool worth more than the blanket's per-item cap, with serial numbers and current values. Insure everyday hand and power tools on a blanket limit. Some tool floaters cap any one unscheduled tool at $1,000, so an expensive laser or camera left off the schedule can be badly underpaid.
Is rented equipment covered by my floater?: It can be, through a property of others or rented equipment limit for gear you are legally responsible for. Most rental contracts make you liable for loss or damage and require proof of insurance. Set the limit to your largest typical rental, and schedule long-term leased machines individually with the lessor named as loss payee.
Will I get replacement cost or actual cash value?: Many floaters settle at actual cash value, which is replacement cost less depreciation, unless you buy a replacement cost extension. Even then, some wordings apply replacement cost only to items under three years old, and only once you actually replace them. Older tools are usually paid at depreciated value, so check the valuation clause.
Does my commercial property policy cover my tools?: Usually only at the premises named on the policy, sometimes with a small off-premises extension. Tools in vehicles, on job sites or in transit generally need a contractor's equipment or tool floater. Licensed vehicles themselves need commercial auto, and materials being built into a project need builder's risk or an installation floater.
Is mechanical breakdown covered?: Not by most floaters, which exclude mechanical and electrical breakdown, wear and tear and gradual deterioration. Damage caused by an insured peril such as fire, collision or overturn is covered. Sudden breakdown of engines, hydraulics or electronics needs equipment breakdown coverage, or a breakdown extension on the floater where the insurer offers one.
What happens when I buy new equipment mid-term?: Most floaters cover newly acquired equipment of a similar kind automatically, but only for a limited time and up to a set limit. One published Canadian form covers new items for 90 days, to $50,000 per loss if no other limit is shown, and then stops covering them unless they have been reported to the insurer.
How much does tools and equipment insurance cost?: Premiums are a rate per $100 of insured value, set by the type and value of the equipment, where it is stored, security measures such as GPS and locked storage, your trade, your deductible and valuation basis, and your theft history. A detailed schedule and documented security usually earn better terms than a single round-number limit.

Sources

Contractors' Equipment Floater, Form CE801 (Rev. 9, October 2012), specimen wording. Premier Group, October 2012.
Tool Floater, Form TF801 (Rev. December 14, 2012), specimen wording. Premier Group, December 14, 2012.
Why insurers may see cargo theft rise in 2025 (Équité Association, Cargo and Heavy Equipment Theft Trend Report 2019-2023). Canadian Underwriter, via the Insurance Institute of Canada, June 26, 2024.
CCDC 41, CCDC Insurance Requirements (publication date December 14, 2020). Canadian Construction Documents Committee, as published by the Roofing Contractors Association of BC, December 14, 2020.
Building construction price indexes, second quarter 2026. Statistics Canada, The Daily, July 24, 2026.
Canada commercial insurance rates fall for third straight year (Marsh Global Insurance Market Index, Q3 2026). Insurance Business Canada, October 21, 2026.

This page is general information, not insurance or legal advice. Coverage depends on your policy wording and the insurer. Speak with a licensed broker about your situation.

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