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FAQ: Tool & Installation Floater Insurance

Thursday, 24 June 2021

As a contractor or tradesman, you want reliable business insurance that is customized to your business needs. When you are dealing with tools and materials to be installed, your BIG broker will likely recommend Installation Floater Coverage and Tool Floater Coverage as a part of your business insurance policy. In today’s blog, we will break down these two coverages so that you can better understand how they protect your business from financial loss.

How Can I Protect My Tools, Equipment and Materials?

Whether you install flooring, decks, cabinetry, granite countertops or pools, you use valuable tools and materials that would be costly to replace if they were lost, damaged or stolen in transit or on the job site. Plus, you would also have to deal with the frustration of project delays, business downtime, and dissatisfied clients. A robust business insurance policy should provide peace of mind to smoothly continue operations and effectively minimize the impact of disruptions from damages to your tools or materials.

What is Tool Floater Coverage?

Tool Floater Coverage insures the tools you use for your business if they are lost or stolen. In the insurance world, the word “tool” refers to items valued up to $1000 – think of your hand saw, lawn mower, power drills, etc. This type of insurance protects you as the contractor or company from needing to shoulder the expense of needing to replace tools.

Example: You keep $20,000 worth of work tools in a cargo trailer at the shop. Overnight, someone breaks in and steals the trailer, leaving you empty-handed and unable to do your job. Without Tool Floater Coverage, you would have to pay out of pocket to purchase all new tools. Tool Floater Insurance would cover costs to replace your tools so that you can get back up and running.

For larger equipment valued above $1000 (e.g. generator, excavator, forklift), ask your broker about scheduling those items for proper coverage and also consider Business Equipment and Breakdown Coverage.

Do You Need Tool Floater Coverage?

If your business work regularly with tools, such as a construction company, contractor, home renovator, plumber, landscaper, etc., you will want to add Tool Floater Coverage to your commercial insurance policy. BIG brokers always take the time to understand your business risks in order to tailor your coverage to your needs.

What is the Installation Floater Coverage?

The other type of coverage that you might need is Installation Floater Insurance. This covers any materials or items that are yet to be installed if they are lost, damaged or stolen. Whether they’ve arrived at the project site, or they are still at the shop, or anywhere in between, Installation Floater Coverage will cover it.

Example 1: Your business installs granite and marble countertops for home renovation projects. As you head to a jobsite, your truck hits a pothole and $15,000 worth of slabs are damaged – cracked, dented and unusable. Because the countertops are still in your possession uninstalled, Installation Floater Insurance would cover the cost for your business to replace them.

Example 2: You’re a framer and you received a delivery of lumber for your next project. You arrive to the jobsite the next morning to find that there was a fire that has destroyed all your lumber before it was installed. Without the proper insurance coverage, you would have to pay out of pocket to replace the lumber. This is a scenario where Installation Floater Insurance can help by covering the replacement cost for the lumber, saving your business from financial hardship.

Do I Need Installation Floater Coverage?

Whether you’re transporting bathroom fixtures, lumber, shingles, landscaping, etc., these types of materials need to be insured to protect your business if they are lost, stolen or damaged before they are installed. As always, BIG brokers focus on understanding your business and its risks. You can trust that their recommendation to purchase the Installation Gloater Coverage is in your business’s best interest.

Can I Combine the Tool & Installation Insurance?

Yes. Tool and Installation coverages are often combined together under one policy. Speak to a BIG broker about how this might fit in your Business Owner’s Policy (BOP).


After this explanation, we hope you have a better understanding of the Tool & Installation Floater Coverages. These coverage options can be incredibly helpful to your business financially when the unexpected happens to your tools and materials. If you have more questions about the Tool or Installation Floater coverage, our commercial team is here to answer your questions. Ready to get a quote? Get started by clicking the button below.