What is a contractor's equipment policy?

Complete Guide to Contractor’s Equipment Policies

Why This Question Matters for Colorado and Utah Residents

Contractors across Colorado and Utah depend on mobile equipment that rarely sits still. From hail along Colorado’s Front Range to high winds and sudden snow in Utah’s Wasatch Front, regional weather and theft exposures make contractor’s equipment coverage essential. Local data shows 68% of inland marine claims are weather-related in Northern Colorado, with an average claim near $28,000. Hail and flood endorsements can be decisive. Meanwhile, theft rates near major corridors like I-25 (CO) and I-15 (UT) make jobsite security and proper coverage limits vital.

• Equipment is always on the move: Work happens at job sites, yards, and in transit—exactly where a standard property policy often doesn’t apply.
• Front Range and Wasatch weather: Frequent hail, sudden downpours, snowmelt flooding, and canyon winds can sideline gear without the right endorsements.
• Real financial impact: With daily disruption costs often around $18,000/day for active projects, downtime without coverage adds up quickly.

What Most People Get Wrong

Many assume their commercial property or auto policy covers off-site machinery. In reality, contractor’s equipment is typically excluded once it leaves your insured location, and off-road equipment isn’t covered by commercial auto. Others buy a basic inland marine form but skip hail or flood endorsements—a big gap across the Rockies and the High Plains.

Another misconception: thinking only scheduled items are covered. You can often choose blanket coverage for numerous small tools, then schedule high-value items like excavators or telehandlers separately at agreed limits.

The Complete Picture

A contractor’s equipment policy is a specialized inland marine form that protects movable tools and machinery—bulldozers, skid steers, lifts, compressors, lasers, welding rigs—on the job, in transit, and in storage. It responds to perils like theft, vandalism, collision/overturn, fire, and weather. In Colorado, carriers commonly offer hail endorsements; agricultural and mountain-adjacent operations may add flood/snowmelt transit extensions. Utah contractors along the Wasatch Front often consider wind and theft exposures near I‑15 and canyon corridors.

Policies can be replacement cost or actual cash value (depreciated). For newer or specialty gear, replacement cost or agreed value helps avoid funding gaps. Typical deductibles range from $500–$2,500. Premiums for construction equipment often run about 0.5–1.5% of item value annually (e.g., ~$1,500–$4,500/year for $300,000 scheduled across several units), with discounts for GPS tracking and secure storage. For overseas shipping, add marine cargo insurance; inland marine won’t cover ocean transit.

Making the Right Decision for Colorado and Utah Residents

Question 1: How should I structure my inventory—blanket vs. scheduled?

Match coverage to how you operate:

• Use blanket coverage for many small tools that move between crews. It’s efficient and reduces paperwork.
• Schedule high-value items (e.g., excavators, telehandlers, pavers) with specific limits, serials, and photos. Consider agreed value for custom or hard‑to‑replace gear.

Question 2: Do my storage and transit patterns change my endorsements?

Yes. If gear sits outdoors along the Front Range or Wasatch Front, add hail and wind; if you stage near creeks or the Provo/Poudre river corridors, include flood/snowmelt transit extensions. For frequent highway moves on I‑25 or I‑15, confirm collision/overturn and theft are clearly included, and ask about discounts for GPS or immobilizers.

Question 3: What valuation and deductible strategy fits my cash flow?

Consider replacement cost on newer primary units and ACV on older backups. Set deductibles you can comfortably absorb—$1,000–$2,500 is common—balancing premium savings against likely out-of-pocket costs. Reassess annually as values and project pipelines change.