If you run a demolition business, you already know that your equipment is everything. An excavator breaking down or a loader getting stolen doesn't just mean replacing machinery—it means halted projects, angry clients, rental fees piling up, and revenue slipping away while you scramble to get back on track. Yet many demolition contractors operate without proper equipment insurance, essentially gambling with their most valuable assets.
Here's what surprises most people: your general liability policy won't cover your own equipment. Neither will standard commercial property insurance if your bulldozer is damaged at a client's site. That's where inland marine insurance—also called contractor's equipment insurance or tools and equipment coverage—comes in. It's specifically designed for the reality of demolition work: heavy machinery constantly moving from site to site, exposed to theft, weather, accidents, and damage during transport.
Why Demolition Contractors Need Specialized Equipment Coverage
The demolition industry faces unique risks that standard business insurance simply doesn't address. Nearly 12,000 pieces of construction equipment are stolen annually in the U.S., with average losses around $30,000 per incident. Heavy equipment like loaders and excavators—exactly what you rely on for demolition work—are among the most frequently targeted items. Worse, recovery rates are dismal: less than 25% of stolen equipment is ever found.
But theft isn't the only threat. Your equipment faces vandalism on unsecured job sites, damage from sudden weather events, accidents during transport, and wear-and-tear incidents like a machine falling into a trench or getting caught in unstable structures during demolition. Without inland marine coverage, you're self-insuring these risks—and for most contractors, that's a gamble they can't afford to lose.
The financial impact extends beyond replacement costs. When equipment is out of commission, you face project delays that trigger schedule penalties, the cost of renting replacement machinery (often at premium rates), potential contract cancellations, and damage to your reputation with clients who expect you to deliver on time. Industry experts note that these hidden costs typically exceed the value of the stolen or damaged equipment itself.
Inland Marine vs. Commercial Property Insurance: Understanding the Difference
This is where contractors get tripped up. Commercial property insurance protects assets at a specific location—your office, your storage yard, your shop. The moment your excavator leaves that address and heads to a demolition site, it's no longer covered under standard commercial property policies.
Inland marine insurance, despite its confusing name that has nothing to do with boats or water, was originally designed to cover goods in transit. Today, it's evolved into the go-to coverage for mobile equipment and tools that move from location to location. For demolition contractors, this means your bulldozers, cranes, loaders, compressors, and specialized demolition tools are protected whether they're on the road, at a client's site, in temporary storage, or anywhere else your work takes them.
The coverage typically includes theft, vandalism, fire, collision damage during transport, weather-related damage, and even scenarios like equipment falling into excavations or being damaged by falling debris during demolition work. Importantly, it covers these risks regardless of where they occur—something commercial property insurance simply can't match for mobile equipment.
Scheduled vs. Blanket Coverage: Choosing the Right Approach
When you're setting up equipment insurance, you'll encounter two main approaches: scheduled coverage and blanket coverage. Most demolition contractors benefit from using both strategically.
Scheduled coverage means individually listing high-value equipment on your policy with specific coverage limits for each item. Industry experts typically recommend scheduling any piece of equipment worth more than $1,500—your excavators, bulldozers, cranes, and other major machinery. This approach ensures you have adequate coverage limits that reflect the actual replacement cost of each piece. If your excavator is worth $150,000, it's scheduled for that amount.
Blanket coverage, on the other hand, covers your smaller tools and equipment as a group under a single limit. This works well for hand tools, power tools, smaller compressors, generators, and other items that would be tedious to list individually. You might have a $50,000 blanket limit that covers all your unscheduled tools collectively. The advantage is convenience and flexibility—you don't need to update your policy every time you buy a new power tool. The trade-off is that you need to ensure your blanket limit is high enough to cover the total value of all your smaller equipment.
Most insurance professionals recommend a hybrid approach: schedule your big-ticket items individually and use blanket coverage for everything else. This gives you maximum protection where it matters most while keeping your policy manageable and cost-effective.
What Equipment Insurance Actually Costs
Demolition contractors typically pay between $9,000 and $100,000+ annually for comprehensive insurance, including equipment coverage. Where you fall in that range depends on several factors: the total value of your equipment, the size of your operation, your claims history, where you work, and whether you handle commercial or residential projects.
Commercial demolition work generally costs more to insure because the stakes are higher—larger structures, more valuable properties, greater potential for catastrophic claims. If you use explosives or wrecking balls, expect your premiums to reflect that increased risk. Your workforce size also matters, particularly for workers' compensation costs, though that's separate from your equipment coverage.
The good news for 2025 is that insurance capacity has increased, with new carriers entering the inland marine market and offering competitive rates with lower deductibles and more favorable terms than in previous years. It's worth shopping around and comparing quotes from multiple carriers who specialize in contractor insurance.
Protecting Your Equipment and Reducing Claims
Having insurance is critical, but preventing losses in the first place keeps your premiums manageable and your business running smoothly. Some practical steps can dramatically reduce your risk of equipment theft and damage.
For job site security, consider GPS tracking devices on high-value equipment—not only does this help recovery if theft occurs, but many insurers offer discounts for tracked equipment. Remove keys and secure equipment when it's not in use. If possible, store equipment in locked, fenced areas overnight. Install immobilizers or kill switches on expensive machinery. Even simple measures like good lighting and visible security cameras can deter thieves who prefer easy targets.
Document everything. Keep detailed records of your equipment including serial numbers, photos, purchase receipts, and maintenance records. In the event of a claim, this documentation makes the process infinitely smoother and helps ensure you receive fair compensation. Update your equipment inventory regularly and notify your insurer when you acquire new machinery or dispose of old equipment.
Getting Started with Equipment Coverage
The process of securing equipment insurance starts with taking inventory. List all your equipment with current values, serial numbers, and replacement costs. Separate items into two categories: high-value equipment worth scheduling individually (generally anything over $1,500) and smaller tools that can go under blanket coverage.
Work with an insurance agent or broker who specializes in contractor coverage. They'll understand the specific risks demolition contractors face and can recommend appropriate coverage limits, deductibles, and policy features. Ask about replacement cost coverage versus actual cash value—replacement cost pays to replace equipment with new items of similar kind and quality, while actual cash value accounts for depreciation. For expensive equipment you rely on daily, replacement cost is usually worth the slightly higher premium.
Review policy exclusions carefully. Some policies may exclude certain weather events, require specific security measures, or limit coverage in certain geographic areas. Understand what's covered and what's not before you sign. And remember, the cheapest policy isn't always the best value—focus on finding comprehensive coverage from a financially stable carrier with a track record of handling contractor claims fairly and efficiently.
Your demolition equipment represents a massive investment in your business's future. Protecting that investment with proper inland marine insurance isn't just smart risk management—it's essential for staying in business when theft, damage, or accidents occur. With the right coverage in place, you can focus on what you do best: safely and efficiently demolishing structures, knowing that your equipment is protected wherever your work takes you.
