Coverage
Your tools: why liability coverage does not pay for them
Liability coverage answers for harm to other people, so a trade business's own stolen tools sit outside it entirely. The category that reaches them is inland marine, which the NAIC defined on the page read July 26, 2026 as covering property in transit, held by a bailee, or movable between locations.
This is the question that produces the most confident wrong answers online, and the reason is that people look for an exclusion. There is no exclusion to find. A liability policy is built around what you do to other people, and your own equipment was never inside that structure to be excluded from it.
Where it does live has a name that gives nothing away.
The category with the misleading name
Inland marine
coverage for property that may be in transit, held by a bailee, at a fixed location, a movable good that is often at different locations (e.g., off road constructions equipment), or scheduled property
A category built around property that moves or sits somewhere other than a fixed building. The regulator definition explicitly includes property held by a bailee.
This is where tools and equipment coverage lives, and it is the same category that reaches a customer's property in your care. The name has nothing to do with water.
Read the definition again and notice “held by a bailee.”The same category that covers your equipment in your own van is the one that reaches somebody else's property while it is in your custody. For a detailer with a customer's car, or a cleaner carrying equipment between sites, that is not two different subjects. It is one line of business asked two questions.
When the machine fails on its own
Equipment breakdown
coverage for the failure of boilers, machinery, and other electrical equipment
Also called boiler and machinery. It answers for machinery failing on its own, which standard property coverage is not written for.
For a trade whose income depends on one machine, this is the difference between a broken pump being a repair bill and being a stopped business.
Three ways to lose the same machine
| What happened | Whose property | Category |
|---|---|---|
| It sprayed a neighbor's car and stripped the paint | Someone else's | General liability |
| It was stolen out of the truck overnight | Yours | Inland marine |
| The pump seized in the middle of a job | Yours | Equipment breakdown |
| It wore out after six seasons | Yours | None. Not an accident |
The gap list
What this does not settle
Liability is about other people, always
Harm you cause to someone else is the subject of a liability policy. Everything you own sits in a different structure, and no amount of liability limit changes that.
Theft and mechanical failure are different claims
A stolen machine and a machine that failed are two different categories with two different coverages. Having one says nothing about having the other.
Wear and tear is not an insurable event
Insurance is built around accidental and unpredictable loss. Equipment wearing out over time is neither, which is why no category covers it.
Limits and sublimits are separate questions
Whether tools are covered is one question, and how much is available for them is another. Coverage that exists at a sublimit far below the value of a rig is a partial answer.
No carrier-by-carrier comparison here
This page describes the categories using regulator definitions. What any particular provider includes, and at what sublimit, is not documented on this site yet.
Knowing the category is the first step. Whether a specific policy includes it, and at what sublimit, is on the declarations page.
Common questions
Does general liability cover my tools if they are stolen?
No, and not because of a technicality. Liability coverage is built around harm to other people and their property. Your own equipment is your property, so it sits outside that structure entirely rather than being excluded by a clause somewhere.
What covers tools then?
The category is inland marine, which the NAIC defines as coverage for property that may be in transit, held by a bailee, at a fixed location, a movable good that is often at different locations, or scheduled property. Tools and equipment coverage for a trade business generally lives inside that category.
Why is it called inland marine if nothing is at sea?
The name is historical. The category grew out of marine insurance covering goods in transit and expanded to property that moves overland, which is why equipment carried in a truck ended up in a line of business named after ships. The definition, not the name, is what tells you what it reaches.
Is that the same coverage as when a customer's property is in my care?
It is the same category. The NAIC definition names property held by a bailee, which is the situation where someone else's goods are in your custody. That is why the same line of business comes up for a detailer with a customer's vehicle and for a contractor with their own tools in a van.
What if the machine breaks on its own rather than being stolen?
That is a third thing. Equipment breakdown coverage, also called boiler and machinery, is defined by the NAIC as coverage for the failure of boilers, machinery and other electrical equipment. A pump that fails mechanically is not a theft and not a liability claim, and standard property coverage is generally not written for wear or internal failure.
Does a business owner's policy include all of this?
A package policy bundles common coverages, and what is inside any specific package is set by that policy. Equipment breakdown in particular is commonly an optional addition rather than part of the base form. The declarations page is where the actual contents are listed.
How this page is sourced
Both definitions are quoted from the glossary published by the National Association of Insurance Commissioners, the association of state insurance regulators, read on July 26, 2026. A regulator glossary was chosen over a carrier explanation because the regulator has no product riding on the definition.
We publish general educational content and cannot review anyone's specific situation or policy. What your policy contains is on your declarations page.
Related: the vehicle version of the same category question is on vehicles and liability. Sourcing standard on methodology.