Insurance Curator Combining Inland Marine, Builders Risk, and Property coverage is essential for HVAC contractors working on commercial construction, retrofit, or service projects in the United States. When structured correctly, these coverages protect tools, portable equipment, materials in transit, and structures under construction — minimizing loss exposure and ensuring your project stays on budget.
This guide is written for HVAC contractors operating in the USA (examples focus on Houston, TX; Los Angeles, CA; and Chicago, IL) and explains how to bundle coverages, typical costs, policy design best practices, and practical steps to implement an insurance program tailored to commercial HVAC projects.
Why combine these three coverages?
- Eliminates coverage gaps between tools-in-transit, on-site equipment, and the structure under construction.
- Simplifies claims handling — one integrated plan reduces disputes over which policy responds.
- Controls total cost — smart layering and scheduling can lower premiums compared to buy-everything standalone.
- Supports contract compliance — owners and GC’s often require builders risk and inland marine proof for specialty contractors.
What each policy covers (short primer)
Builders Risk
- Covers physical loss or damage to the structure while under construction, including installed HVAC systems, building materials on-site, and temporary structures.
- Typical premium: 1%–4% of the total completed value of the project (varies by location, project type, and risk). Source: Insurance Information Institute.
(See: https://www.iii.org/article/builders-risk-insurance)
Inland Marine (Contractors' Equipment / Tools & Equipment)
- Covers portable tools, diagnostic gear, scaffolding, and equipment while in transit, at jobsite, and often in storage.
- Can be written as scheduled (specific items) or blanket (all owned equipment up to a limit).
- Cost drivers: aggregate value scheduled, deductible chosen, theft exposure, and whether replacement-cost endorsement applies. (More background: https://www.nextinsurance.com/knowledge/inland-marine-insurance/)
Commercial Property
- Covers owned buildings, fixed equipment, and permanently installed HVAC units at your business premises (warehouse, shop).
- Important for protecting spares, shop tools, and replacement stock.
How to structure combined coverage for HVAC projects
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Start with Builders Risk for each project
- Named-insured normally is the owner or GC; HVAC contractors are frequently required as an additional insured and to carry inland marine for equipment and materials. Confirm policy wording for coverage of subcontractors’ tools/equipment and materials that become part of the work.
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Purchase Inland Marine/Contractors’ Equipment in the contractor’s name
- Schedule high-value items (vacuum pumps, refrigerant recovery units, portable jacks) to avoid sublimits.
- Use blanket coverage for small portable tools to reduce administrative burden.
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Keep Commercial Property active for shop inventory and fixed assets
- Ensure spare parts stock, shop cranes, and test benches are listed with adequate limits and replacement cost valuation.
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Coordinate limits and deductibles
- Align deductibles so a single loss won’t trigger disproportionate out-of-pocket exposure across policies.
- Example: $2,500 inland marine deductible, $5,000 builders risk deductible on larger losses that affect the structure.
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Add endorsements as needed
- Replacement cost on inland marine, off-premises coverage extension on commercial property, and soft costs/time element coverage on builders risk.
Pricing examples by location (commercial HVAC focus)
Below are sample, realistic ranges for typical commercial HVAC contractors in 2025 market conditions. Prices vary by insurer, risk profile, and bond/contract requirements.
| Coverage Type | Typical Annual Cost (Houston, TX) | Typical Annual Cost (Los Angeles, CA) | Typical Annual Cost (Chicago, IL) |
|---|---|---|---|
| Builders Risk (1%–2% of project value) — $500k project | $5,000–$10,000 | $5,000–$12,000 | $5,000–$11,000 |
| Inland Marine (Blanket $50k limit) | $400–$1,200 | $500–$1,500 | $450–$1,300 |
| Contractors’ Scheduled Equipment (e.g., $100k scheduled) | $1,000–$3,000 | $1,200–$3,600 | $1,100–$3,200 |
| Commercial Property (shop / spare parts $250k) | $1,000–$3,000 | $1,200–$3,500 | $1,100–$3,200 |
Notes:
- Builders risk cost estimate is based on industry standard of roughly 1%–4% of completed value; lower end shown for less risky projects. (III: https://www.iii.org/article/builders-risk-insurance)
- Inland marine/contractors’ equipment annual premiums commonly run several hundred to a few thousand dollars, depending on limits and schedule. See insurer guidance (Next Insurance: https://www.nextinsurance.com/knowledge/inland-marine-insurance/).
- National insurers that commonly serve HVAC contractors include Next Insurance, The Hartford, Nationwide, Travelers, and Hiscox. For small commercial contractors, Next Insurance advertises package pricing for business insurance with policies sometimes starting under $50/month for basic liability (actual total program costs are higher when inland marine and builders risk are included).
Practical steps to implement for a commercial HVAC job
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Inventory and value your assets
- Use a checklist and photos. See related: Checklist for Inventorying and Insuring Portable HVAC Tools and Diagnostic Equipment.
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Determine who will be named insureds
- Owner, GC, subcontractor — confirm endorsement language for additional insureds and waiver of subrogation.
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Decide scheduled vs blanket for tools
- High-value refrigerators/recovery machines = schedule; small hand tools = blanket. Read: Scheduled vs Blanket Tool Coverage: Which Option Fits Your HVAC Company?.
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Secure written proof of coverage for contracts
- Certificates of insurance and endorsements that meet contract limits and waiver requests.
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Review theft prevention and transport controls
- GPS tracking, locked toolboxes, anti-theft signage. See: Theft, Loss and Transit Risk Management for HVAC Tools: Insurance and Prevention Tactics.
Common pitfalls and how to avoid them
- Assuming builders risk covers subcontractor tools — it usually does not unless specified. Always carry inland marine for your tools.
- Under-scheduling high-value equipment — results in claim shortages.
- Mismatched policy wording — ensure that exclusions (flood, earthquake) are managed with endorsements if needed for the job location.
- Not coordinating soft costs/time element coverage — delays after a covered loss (e.g., replacement delays causing extended field labor) can be costly.
Example claim scenario
A theft at a downtown Los Angeles site removes portable recover units and rooftop temp units during a 3-day window. Proper structure:
- Inland marine responds for stolen contractor-owned tools (replacement-cost if endorsed).
- Builders risk covers installed HVAC units that were completed and awaiting owner turnover.
- Commercial property covers spare parts stolen from contractor shop (if off-premises coverage included).
Choosing insurers and expected pricing guidance
- Next Insurance — strong online quoting for small commercial contractors; liability-first packages sometimes advertised from ~$39/month for basic GL. Inland marine add-ons and equipment scheduling increase program cost substantially. (https://www.nextinsurance.com)
- The Hartford — longstanding contractor markets; offers contractors’ equipment and inland marine solutions with customized underwriting. (https://www.thehartford.com)
- Nationwide — large carrier with builders risk and property offerings; builders risk guidance and project endorsements available. (https://www.nationwide.com)
Insurer quotes vary by location and underwriting details. For a mid-size HVAC contractor in Houston carrying $100k scheduled equipment + $50k blanket tools + business property $250k, expect a combined inland marine/property premium in the $1,500–$4,000/year range; adding project-specific builders risk is typically a project cost passed through (1%–2% of project value) per the III and carrier guidance.
Quick checklist before bidding
- Inventory and schedule high-value equipment.
- Confirm contract insurance requirements.
- Obtain builders risk wording and ensure subcontractor coverage language.
- Choose scheduled vs blanket tool coverage.
- Set deducibles aligned to your cash flow.
- Add replacement-cost and off-premises endorsements as needed.
Related resources (internal links)
- Protecting Tools and Jobsite Gear: Inland Marine and Contractors' Equipment Explained for HVAC Businesses
- Scheduled vs Blanket Tool Coverage: Which Option Fits Your HVAC Company?
- Checklist for Inventorying and Insuring Portable HVAC Tools and Diagnostic Equipment
Sources
- Insurance Information Institute — Builders Risk Insurance overview: https://www.iii.org/article/builders-risk-insurance
- Next Insurance — Inland Marine Insurance guide: https://www.nextinsurance.com/knowledge/inland-marine-insurance/
- The Hartford — Contractors’ equipment and tools insurance resources: https://www.thehartford.com/business-insurance/contractors-equipment
If you’d like, I can prepare a one-page insurance specification sheet for bids on a sample $750,000 HVAC retrofit in Houston including recommended limits, endorsements, and an estimated premium breakdown.