Owned equipment insurance for contractors
Owned equipment is the core of a contractors equipment policy. The choices that matter are how each piece is listed, how it is valued after a loss, and what deductible you carry.
Scheduled equipment
A schedule lists each machine with its year, make, model, serial or VIN, and the value you want to insure it for. The schedule is the clearest way to insure expensive equipment, because there is no question at claim time about whether the piece was covered or what it was worth.
When you buy or sell a machine, tell whoever handles your policy. Most policies give a short automatic window for newly acquired equipment, often 30 to 90 days, but that window does not replace adding it to the schedule.
Apply online
The online application asks the questions underwriters need for this coverage. Business owners fill it out directly, and insurance agents can complete it for a client or send it to them. Insurance agents can also request an appointment.
One equipment floater. Four coverages. Pick any combination.
You don't need four policies. Each of these is an option on the same equipment floater, and the application asks which ones you want.
- Equipment you ownYou are here
- Equipment rented FROM othersRental and leased machines in your care
- Equipment rented TO othersYour machines while someone else has them
- Tools and small equipmentHand and power tools, lasers, ladders
Blanket coverage
A blanket limit covers unscheduled equipment up to a total amount, with a cap on any one item. It suits compactors, generators, light towers, saws and attachments that change often.
- Total blanket limit: the most the policy pays for all unscheduled items in one loss
- Per-item maximum: the most it pays for any single piece
- Anything above the per-item maximum should be scheduled
Replacement cost or actual cash value
How a machine is valued decides what the policy pays after a total loss. The schedule shows a value for each piece, but the valuation clause decides whether that number is a ceiling or a promise.
Actual cash value
Actual cash value pays what the machine was worth on the day of the loss, after depreciation. It suits older equipment that you would replace with another used machine.
Replacement cost
Replacement cost pays to replace it with a similar new or like-kind machine. Some carriers offer replacement cost only on equipment under a certain age, often five years.
Agreed value
Some policies let you agree on a value per machine at the start of the policy, so a total loss pays that stated amount without a depreciation argument. Ask whether agreed value is offered and whether the coinsurance clause is waived when it is.
Financed and leased machines
If the machine is financed, check what your lender requires. Many finance agreements require physical damage coverage at a stated amount and require the lender be named as loss payee.
How to build your equipment schedule
- Pull your fixed asset list or depreciation schedule from your accountant. It is the most complete starting list of what you own.
- Walk the yard and match each machine to the list. Record year, make, model and serial number or PIN from the data plate, not from memory.
- Set a scheduling threshold, for example any single item above the blanket per-item maximum, and put everything above it on the schedule.
- Assign a value to each scheduled machine based on what a comparable machine would cost today. A dealer quote or a recent auction result is a reasonable source.
- Add up the remaining smaller items and attachments to set the blanket limit.
- Mark which machines are financed or leased and collect the exact loss payee name and address the lender wants on the policy.
- Recheck the schedule at renewal and whenever you buy or sell a machine.
Have this ready before you apply
- A list of each machine over your scheduling threshold: year, make, model, serial number and value
- The total value of smaller items for the blanket limit
- Where equipment is stored overnight and how the yard is secured
- Any lenders or lessors who need to be listed
- Equipment losses in the past five years
Common questions
What value should I put on each machine?
Use the amount it would cost to replace it with a comparable machine today. Under-insuring lowers the premium but some policies apply a coinsurance penalty, which reduces a claim payment when the stated value is too low.
Are attachments covered?
Attachments such as buckets, breakers and augers can be scheduled on their own or picked up under the blanket limit. Ask whether the policy treats an attachment as part of the machine it is mounted on.
Does the policy cover equipment while it is being transported?
Most equipment floaters cover equipment in transit on your own trailer. Shipping by a for-hire carrier may need the transit extension, so mention it on the application if you ship equipment long distances.
What happens if I buy a machine mid-term?
Many policies include newly acquired equipment automatically for a set number of days and up to a set limit. Report the purchase within that window with the serial number and value so it is added to the schedule before the automatic coverage ends.
Need a contractor license bond?
Many states and cities require a contractor license bond before you can get licensed or pull permits. Find the bond your state requires.
Ready for a quote?
One online application. Owners and agents both welcome.
Start the contractors equipment applicationRelated coverage
Equipment Floater
Covers mobile equipment wherever it goes: the yard, the trailer, and every job site in between.
Coverage & applicationEquipment Rented From Others
Covers machines you rent or lease for a job, so a rental contract loss doesn't come out of pocket.
Coverage & applicationContractors Tools
Hand and power tools on the truck, in the gang box, and at the job site.
Coverage & applicationWhat Affects the Cost
The rating factors that move a contractors equipment premium up or down.
Coverage & application