You show up to the jobsite Monday morning, and your entire trailer is gone. $23,000 in tools, compressors, and that laser level you bought three months ago… gone overnight.

You call your insurance agent confident you’re covered… and then you find out you’re not.

Equipment theft has exploded over the last few years. Tools stolen off trucks. Skid steers disappearing from fenced-in jobsites. Trailers emptied out like a grocery bag. And most contractors assume their policy covers all of it—until the claim gets denied.

Equipment theft is one of the fastest ways to lose money in construction—and one of the easiest to misunderstand.

This article breaks down what’s actually covered, what isn’t, and the simple steps you can take now so you’re not paying out of pocket later.

1. The Four Buckets of Equipment Coverage

Most contractors talk about “equipment” like it’s one category. Insurance companies don’t. They split equipment into four different buckets, each with its own rules.

Understanding these buckets is the difference between getting a check… or a bill.

1. Tools-on-Vehicle Coverage

This covers hand tools and small tools kept in or on your truck.
Typical limits are $5K–$10K unless you boost them.

But watch the exclusions:

Not covered if left in an unlocked truck
Often not covered if stolen from a trailer, even if attached
Many policies exclude overnight theft from open beds

A locked cab is usually covered. A toolbox in the bed? Maybe. A trailer? Often no.

2. Small Equipment (Inland Marine / Contractor’s Tools)

This bucket covers generators, compressors, compaction equipment, saws, mixers, laser levels, and anything “mid-size.”

The upside:

Covered anywhere in the U.S.

The catch:

Most policies require scheduled items—you give your agent the make, model, serial number, and value, and it gets listed individually
Unscheduled limits often have per-item caps (e.g., only $2,500 per item even if your total limit is $50K)

That $10K laser level? If you didn’t schedule it, your policy might only pay $2,500.

Think of scheduling like giving each piece of equipment a name tag at the insurance party. If it’s not on the list, it doesn’t get in.

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3. Large Equipment (Inland Marine / Contractor’s Equipment)

This covers big stuff: skid steers, mini-excavators, telehandlers, boom lifts.

Important:

These items usually must be scheduled one by one
Serial numbers matter
Photos matter
GPS helps a claim but does not guarantee payment—GPS proves where the equipment was, not whether you locked it or followed security protocols

Large equipment claims fall apart when contractors assume “it’s on my policy” but never actually scheduled the item.

4. Rented Equipment Coverage

This is the most misunderstood bucket—and where the biggest financial surprises happen.

If you rent equipment, you must add Rented Equipment or “Leased Equipment” coverage to your policy, with limits that match what you actually rent ($25K–$250K typical).

Otherwise, you’re eating the replacement cost.

Why all of this matters:
I’ve seen contractors with $80K of equipment across all four buckets… but only $5K of total coverage because they didn’t understand the gaps.

2. The Biggest False Assumptions Contractors Make

Now that we’ve covered the buckets, let’s hit the real issue: the myths that get contractors burned.

“If it’s in my truck, it must be covered.”

Not always. Some policies exclude overnight theft, unlocked vehicles, or anything stolen from trailers—even attached ones.

“My general liability covers stolen equipment.”

General liability covers what you damage. Not what gets stolen from you.

“I scheduled my skid steer once, so it’s still covered.”

Coverage can lapse if you replace it or forget to update your serial numbers.

Your policy doesn’t magically update itself.

“The rental company’s damage waiver protects me.”

Damage waivers protect the rental company, not you. They often exclude theft, flooding, rollovers, and “mysterious disappearance.”

Sometimes waivers do cover theft—but only if every security rule was followed perfectly. Miss one detail, and you’re on the hook.

“My employees’ tools are covered.”

Usually not. Employee-owned tools require special endorsements.

“Everything is covered up to my policy limit.”

Wrong. Per-item caps matter more than total limits. A $14K saw might only be covered for $2,500.

“Assuming coverage is the #1 way contractors end up buying the same tools twice.”

3. How Rented Equipment Coverage Actually Works

This is where contractors take the biggest hits.

Let’s say you rent a skid steer, mini excavator, or boom lift. You have three choices:

Option 1: Buy the rental company’s damage waiver

Adds 10–15% to the rental bill.
Covers accidental damage.
Sometimes covers theft—sometimes not.
Either way, it mostly protects them, not you.

Option 2: Use your own policy’s rented equipment coverage

Cheaper if you rent often—if you rent 10+ times a year, paying one premium is far cheaper than paying 10–15% on every rental.

But it only works if:

Limits are high enough (e.g., $100K)
Deductible is known and acceptable
Coverage includes:
- Theft (with forced entry)
- Optional mysterious disappearance
- Loss of use charges
- In-transit protection

Option 3: Go bare

Please don’t.

Real example:
A contractor rented a $65K skid steer. It was stolen overnight.
His policy only had $10K in rented equipment coverage.
He paid the other $55K out of pocket.

If you rent more than a few times a year, add enough rented equipment coverage to match the equipment you actually rent.

4. Field-Proven Ways to Reduce Theft

Insurance is the backup plan. Prevention is Plan A.

Here’s what works in the real world:

Lock tools in the cab, not the bed
Chain trailers to immovable objects, tongue-in toward walls
Never leave keys in equipment (happens constantly)
Take expensive items home over weekends
Use job boxes and chain them to something heavy
Avoid big company logos on trailers (they help thieves shop)
Keep serial numbers and photos in cloud storage
Use AirTags/GPS on anything over $500
Assign one person to check the equipment list daily

These steps also help prove to your insurance company that you took reasonable precautions — which matters when they evaluate your claim.

5. Real Claims (Anonymized)

Claim 1: Denied — No Forced Entry

Unlocked trailer. $18K in tools stolen.
Tools-on-vehicle limit: $5K.
Claim denied. Out of pocket: $18K

Claim 2: Partially Paid — Underinsured Rental

$80K boom lift stolen.
Rented equipment limit: $25K.
Out of pocket: $56K

Claim 3: Fully Covered — Scheduled Equipment

$42K skid steer stolen and recovered damaged.
Properly scheduled with serial number, GPS, photos.
Out of pocket: $500

The difference?
Small details.

Closing: Get Your Coverage Right Before You Need It

Equipment theft isn’t just annoying—it’s a five-figure hit if you don’t understand your coverage.

Call your agent this week and ask:

What’s my tools-on-vehicle limit?
Do I have inland marine? What’s scheduled?
Do I have per-item caps?
Do I have rented equipment coverage? What limits?
Does my policy require forced entry?

Fix your coverage now—before your equipment disappears and you learn the hard way.

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The Truth About Equipment Theft and Your Insurance