Commercial Property Coverage for Tools Stolen from Jobsite

• By: The Big "I" Virtual University
• January 23, 2026

A general contractor filed a claim after tools were stolen from an employee at an active construction project location. The tools belonged to the employee and were kept in a locked Conex storage box that was supplied by the general contractor. Tools were stolen from the Conex a few days in a row before the insured finally talked the police into setting up at the construction site, after which the theft stopped. 

The insured paid the employee for the actual cash value (ACV)—$4,000—of the tools that were stolen. The commercial property policy form only covers ACV of the stolen tools. However, the carrier denied coverage, saying that the tools were not located at the insured’s premises.

The agent thinks there should be coverage, as the enhancement endorsement CP 91 44 01 15 states coverage applies to “tools owned by your employees while used in your business or when in your building.”  

Q: Should the carrier pay a claim for an employee’s stolen tools that were stored in a locked storage container on an active construction project?

Response 1: You are correct in stating employee tools would be covered while “used in your business.” However, the employee tools coverage extension section of the endorsement goes on to say:

w. We will not pay for a loss that is caused by or results from theft or attempted theft of employee tools unless such loss occurs:

(1) In a building and there is visible evidence of forcible entry to or exit from that building; or

(2) From a locked vehicle and there is visible evidence of forcible entry.

The tools weren’t in a locked vehicle, so I don’t think the claim is covered.

Having said that, there is a little ambiguity in w.(1), which might give you a point to argue. It doesn’t say “your” building, it says “a” building.  To be consistent and clear, the carrier should have stated “your” building. This argument is a stretch, and I don’t think this coverage intended to cover theft of employee tools other than at the employer’s building or in a locked vehicle.

Response 2: Were the employee tools used in the business? Yes, the tools were stored at the insured’s job site and thus available for use in the insured’s business. Nobody uses their tools 24 hours a day.

Did the theft occur in a building? No, a Conex trailer is not a building.

Did the theft occur from a locked vehicle? No, a Conex trailer is not a vehicle if the definition of a “vehicle” calls for it to be self-propelled. However, according to Merriam-Webster, a vehicle can be defined as “a means of carrying or transporting something.”

Is there visible evidence of forcible entry? Yes, assuming the term “broken into” that is used in the property loss notice means there is such evidence.

Since a locked Conex trailer is as secure or more secure than most vehicles, I think the carrier should pay, regardless of what vehicle definition is used. Since there were three multiple break-ins, each on a different day, each is subject to the policy’s $500 deductible.

However, if there is no visible evidence of forcible entry, the insured is out of luck.

Response 3: I see where you are coming from, and I also see where the carrier gets its opinion. 

The DS 70 23 01 08 states “insurance at the described premises applies only for coverages for which a limit of insurance is shown” and lists one address. This means there is only coverage at the insured’s location. The address is different from the one on the loss notice.

The endorsement CP 91 44 01 15 states: 

This endorsement modifies insurance provided under the following:

BUILDING AND PERSONAL PROPERTY COVERAGE FORM

The following is a summary of increased limits of insurance and additional coverages provided by this endorsement. This endorsement is subject to the provisions of your policy which means that it is subject to all limitations and conditions applicable to this Coverage Part, Coverage Form or Causes of Loss Form unless specifically deleted, replaced, or modified herein. This endorsement is applicable only to those location described in the Declarations.

This means coverage applies to the building listed on the declarations page. To further reinforce this, the endorsement goes on to state:

A. The following changes apply to Section A. COVERAGE of the BUILDING AND PERSONAL PROPERTY COVERAGE FORM and the CONDOMINIUM ASSOCIATION COVERAGE FORM:

w. Employee Tools Coverage

You may extend the insurance that applies to your Business Personal Property to apply to loss or damage by a Covered Cause of Loss to tools owned by your employees while used in your business or when in your building. 

The tools needed to be in a building listed on the premises. Because the endorsement is “subject to” the other language of the policy, this means the tools would only be covered while at the insured premises listed on the declarations page. 

The insured has some coverage through A. 14. Property Off-Premises but this would be for business personal property.

I want to point out that A. 13. Personal Effects and Property of Others states that the most the policy will pay is $15,000. That is less than the Employee Tool Coverage sublimit of $25,000. I don’t know if that will ever be in conflict, but it might be something to fix before it does—as well as offering coverage for property at job sites. 

Response 4: The endorsement states:

5. Coverage Extensions

Except as otherwise provided, the following Extensions apply to property located in or on the building described in the Declarations or in the open (or in a vehicle) within 100 feet of the described premises.

The “located in or on the building described in the Declarations” condition applies “except as otherwise provided.” The employee tools coverage extension does, in fact, provide otherwise. It extends the BPP coverage so that it applies to tools owned by the named insured’s employees if either one of the following is true at the time of the loss: one, the tools were being used in the named insured’s business; or two, the tools were in the named insured’s building.

Assuming that the jobsite was the one on which the named insured was working, it is arguable that the tools were being used in the named insured’s business. Since only one of the two conditions must be true for coverage to apply, that fact triggers the coverage.

The only remaining questions are whether there was visible evidence of forcible entry to or exit from the building where they were stored, as well as whether the ACV of the tools at the time of loss was greater than the $500 deductible. You indicated the ACV was $4,000, so the deductible is not an issue.

Finally, why would a contractor’s employee’s tools be lying around the insured’s building? A reasonable assumption is that the employee brought them to work for use on a project, and contractors’ projects are off-premises. To claim that the tools must be in the insured’s building for them to be covered renders the coverage extension illusory.

If there were signs of forcible entry or exit, I do not see why this loss should not be covered.

This question was originally submitted by an agent through the Big “I” Virtual University’s (VU) Ask an Expert service, with responses curated from multiple VU faculty members. Answers to other coverage questions are available on the VU website. If you need help accessing the website, request login information.

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