The Oklahoma Contractor’s Guide to Inland Marine Insurance

Introduction: What is Inland Marine Insurance, Anyway?

Let's be honest, "Inland Marine" is a weird name for an insurance policy. It has nothing to do with boats or water. Think of it instead as Tools and Equipment Insurance for contractors.

Simply put, it’s the coverage that protects your gear when it’s on the move. Whether your tools are in your truck, at a job site, or in a temporary storage unit, this policy is designed to cover them.

This article will break down in plain English what Inland Marine insurance is, why it’s a must-have for Oklahoma contractors, what it covers, and how to avoid common mistakes that could cost you big time.

Why It Matters for Contractors

You probably already have General Liability and Commercial Auto insurance. Many contractors think that’s enough, but it creates a huge, expensive blind spot.

Your Commercial Property Policy Stops at the Door. A standard property policy covers your shop and the tools inside it. The moment you load that gear into your truck to head to a job, it’s likely no longer covered by that policy.
Your Commercial Auto Policy Only Covers the Vehicle. If your work van gets broken into, your auto policy will help fix the broken window, but it will do nothing for the thousands of dollars of tools that were stolen from inside.

This is the gap where contractors get hit the hardest. Inland Marine is the only policy designed to fill that gap, protecting the tools and equipment that actually make you money.

Real-World Risks for Oklahoma Trades

For the HVAC Tech: You’re lifting a new rooftop unit when a strap fails, and the unit is dropped and damaged. An Inland Marine policy with an Installation Floater can cover the cost to repair or replace it.
For the Plumber: Your expensive sewer inspection camera gets crushed by a collapsing pipe during a job. That’s a huge out-of-pocket loss unless you have Inland Marine to cover accidental damage.
For the Electrician: You stop for lunch, and someone smashes your truck window, stealing all your power tools. Inland Marine is what pays to replace that stolen gear so you can get back to work.
For the General Contractor: You rent a skid steer for a grading project, and an operator accidentally tips it over, causing major damage. The rental company holds you responsible, but Inland Marine with a Rented Equipment endorsement can cover the repair bill.

What It Covers and What It Doesn’t

This policy is flexible, but it’s important to know the basics of what’s typically included and what’s left out.

What’s Usually Covered:

This policy protects your gear from a wide range of common risks, often called "perils." Most policies are written on an "all-risk" basis, which means you're covered for any event that isn't specifically excluded.

This includes things like:

Theft and Vandalism: This is one of the biggest reasons contractors get this policy.
Fire, Wind, and Hail: Critical for tools and materials left on a job site.
Accidents: Covers damage from a vehicle collision or from accidentally dropping a piece of equipment.
Your Tools and Equipment: This is the core of the policy, covering everything from hand tools to larger machinery like generators and compressors.
Materials for a Job: It can protect supplies like copper wire, fixtures, or an HVAC unit while you’re transporting them or they’re stored at the job site waiting to be installed.

What’s Usually NOT Covered:

No policy covers everything. Here are some common exclusions:

Your Truck or Van: The vehicle itself is covered by your Commercial Auto policy, not Inland Marine.
Normal Wear and Tear: Insurance is for sudden accidents, not for equipment that gets old and breaks down from normal use.
Employee Theft: If one of your own employees steals from you, that’s typically covered by a separate policy called Crime or a Fidelity Bond.
Major Disasters: Widespread events like floods and earthquakes are almost always excluded and require their own separate policies.

Who Needs It and When

If you’re a contractor who ever takes tools and equipment away from your primary shop, you need this coverage.

In Oklahoma, the state requires licensed trades like plumbers, electricians, and mechanical contractors to carry General Liability insurance and a surety bond. This is a common point of confusion. Those policies are designed to protect the public from your mistakes, not to protect you from a loss.

They will not pay you a dime if your tools are stolen or your equipment is damaged.

Beyond state requirements, many general contractors and commercial project owners will require you to show proof of Inland Marine coverage before you can even start working on their site. In these cases, the policy isn't just protection; it's a requirement to get the job.

Frequently Asked Questions

Do I really need this if I have a Business Owner's Policy (BOP)?
Yes. A BOP bundles General Liability and Commercial Property insurance. The property part of that policy is tied to your main business address and doesn’t properly cover your gear once it’s on the road or at a job site.
Does Inland Marine cover theft from my locked work truck? Absolutely. This is one of the most common and important reasons to have the policy. It covers the stolen contents, while your auto policy covers damage to the truck itself.
How much does this insurance cost? The price varies. It’s influenced by factors like the total value of your tools and equipment, the type of work you do, your claims history, and the deductible you choose. The best way to find out is to get a quote based on your specific business.

Mistakes to Avoid

Getting the policy is the first step, but setting it up wrong can leave you with a denied claim. Avoid these common pitfalls.

Under-insuring Your Gear. Many contractors guess the value of their tools and end up underinsured. Keep a detailed inventory of your equipment and its replacement cost. If you’re insured for $20,000 but have $40,000 worth of gear, you could face a penalty on a claim or not get enough money to replace what was lost.
Forgetting About Rented Equipment. Your standard policy only covers equipment you own. If you rent a scissor lift or an excavator for a job, you need to add a specific "Rented and Leased Equipment" endorsement. Without it, you’re on the hook for any damage.
Not Understanding How You Get Paid. Policies pay out in one of two ways: Actual Cash Value (ACV) or Replacement Cost (RC). ACV pays you what your stolen five-year-old generator was worth, which might only be a fraction of what it costs to buy a new one. RC pays you the full amount to buy a brand new replacement. RC costs a little more, but it’s almost always the better choice for a working contractor.

Oklahoma-Specific Insights

While the insurance works the same everywhere, a few local factors make it especially important for Oklahoma contractors.

Severe Weather: You know the drill. Oklahoma is in the heart of Tornado Alley, and severe thunderstorms are a regular threat. An Inland Marine policy can cover your equipment if it’s damaged by wind or hail while sitting at an exposed job site.
The Licensing False Alarm: As mentioned, Oklahoma’s licensing boards require you to have insurance to protect your customers. This can give contractors a false sense of security, making them think they’re fully covered when their own most valuable assets are completely uninsured.

Key Takeways

Your tools and equipment are your livelihood. Protecting them isn't an extra, it's essential.

Here’s what to remember:

Your other insurance policies (Property and Auto likely do not cover your tools and equipment once they leave your shop.
Inland Marine is the policy designed to protect your gear while it’s in transit, in your truck, or at a job site.
Theft from a work vehicle is the #1 reason contractors need this coverage.

When you talk to your agent, be ready to ask the right questions.

"Is this quote for Replacement Cost (RC) or Actual Cash Value (ACV)?"
"Does this policy cover equipment I rent or lease?"
"What is my deductible for theft? Is it higher than for other claims?"

Taking a little time to get the right coverage can be the one thing that keeps a bad day from turning into a business-ending disaster.