Tools, Equipment, and Business Income Coverage
Most small business policies are built around one address. The tools in a truck, the laptop at a client's office, the walk-in cooler that fails on a Friday night, and the income you lose while you rebuild are each handled by a separate coverage part, and each one has to be chosen.
These are the add-ons we check on almost every review: inland marine for property that moves, equipment breakdown for machinery and electronics that fail, and business income for the revenue that stops after a covered loss.
What it covers
- Tools and equipment at job sites, in vehicles, and in transit (inland marine, often called a contractors equipment or tools floater)
- Laptops, cameras, and portable gear used away from your premises
- Sudden mechanical or electrical breakdown of HVAC, refrigeration, boilers, and electronics (equipment breakdown)
- Food and inventory spoiled when that equipment fails, when added
- Lost net income and continuing expenses after a covered loss closes or slows the business (business income)
- Extra costs to keep operating, such as a temporary location or rented equipment (extra expense)
What it does not cover
- Wear and tear, rust, and gradual deterioration
- Inventory shortages and items that simply go missing without a known cause
- Theft from an unattended vehicle that does not meet the policy's locked vehicle conditions
- Flood and earthquake, unless added separately
- Income lost to a slow season or a cause the property policy does not cover
Who needs it
Contractors and trades with tools in trucks and on job sites, photographers and AV crews with portable gear, IT and field service businesses, restaurants and grocers that depend on refrigeration, clinics and offices with expensive electronics, and any business that could not pay its bills for a few months if the doors closed after a fire.
What drives the price
- Total value of tools and equipment, and the single most expensive item
- Where gear is kept overnight and how vehicles are secured
- Scheduled (itemized) versus blanket limits
- Replacement cost versus actual cash value
- Revenue, margins, and how long a rebuild would really take
- Deductible and waiting period chosen
Where owners get caught: the policy stops at the door
A business owners policy is written around your premises. Property away from it is often limited to a small off-premises amount, and theft from a vehicle may only be covered with signs of forced entry. Business income has its own traps: a limit sized years ago, a waiting period before payments begin, and a restoration period that ends long before customers come back. We size each one from your real numbers, not last year's renewal.
Tools, Equipment & Business Income: common questions
Does my business owners policy cover my tools at a job site?
Often only up to a small off-premises limit, if at all. Tools that move between job sites usually belong on an inland marine policy that follows the equipment, with limits set by item or by a blanket amount.
What is equipment breakdown coverage?
Coverage for sudden mechanical or electrical failure of equipment such as HVAC, refrigeration, boilers, and electronics. Standard property forms exclude mechanical breakdown, so this is usually added as an endorsement, often with spoilage coverage for food or inventory.
How much business income coverage do I need?
Enough to cover lost net income plus the expenses that continue, like rent, payroll you want to keep, and loan payments, for as long as a rebuild would realistically take. We work it from your financials and a realistic restoration timeline, then look at an extended period for the months it takes customers to return.
Are my employees' personal tools covered?
Not automatically. Many policies cover employee tools only under a small sublimit or not at all. If your crew brings their own tools, we add them deliberately.
Tools, Equipment & Business Income in practice
Illustrative stories of businesses that needed it, and what else their review turned up.
Usually written alongside
Commercial Property
Buildings, equipment, inventory, and improvements, valued at what it would really cost to replace.
Learn moreBusiness Owners Policy
Property, liability, and lost income bundled into one policy. The right starting point for most small businesses.
Learn moreGeneral Liability
Injury and property damage claims from customers, clients, and the public. The policy most contracts require.
Learn morePart of the programs we build for contractors & trades.
Not sure your tools and equipment coverage fits?
Send us what you have. We review it line by line against your leases and contracts, and tell you plainly what is missing. Free, and no obligation.