What Does Insurance for Drilling Equipment Actually Cover? Rigs, Tooling, and Attachments
If you own a directional drill, auger boring machine, vacuum excavator, or a fleet of support equipment, you've probably asked the same question: what does drilling equipment insurance actually cover when something goes wrong?
The short answer is that drilling equipment insurance may cover rigs, tooling, attachments, and other specialized equipment against certain types of physical loss or damage, depending on the policy. However, not every loss is covered, and many contractors are surprised to learn that protection often comes from several different policies working together. Understanding those coverages before a claim happens is one of the best ways to avoid expensive surprises.
What Does Drilling Equipment Insurance Actually Cover?
Drilling equipment insurance typically refers to inland marine coverage and related policies that may protect directional drills, auger boring machines, tracking systems, tooling, attachments, trailers, and support equipment against covered causes of loss such as theft, fire, vandalism, transportation accidents, and certain weather events.
Coverage depends on the policy, equipment schedule, exclusions, limits, and the circumstances surrounding the loss. Most drilling contractors need more than one policy to fully address their equipment and operational risks.
Why Drilling Equipment Needs Specialized Coverage
Drilling equipment presents unique risks compared to equipment that stays in one yard or facility.
Directional drilling contractors routinely:
Move equipment between jobsites
Transport tooling and electronics
Operate near underground utilities
Work on municipal and utility projects
Leave equipment on active jobsites overnight
Perform work in remote locations
A standard property policy may not fully address these exposures because drilling equipment spends much of its time away from the contractor's primary business location.
That's why many drilling contractors rely on inland marine insurance, which is specifically designed to cover mobile equipment and tools that travel from project to project.
The Types of Equipment Commonly Insured
Coverage often extends beyond the drill itself.
Equipment that may be insured includes:
Horizontal directional drilling rigs
Auger boring machines
Pneumatic piercing tools
Vacuum excavation equipment
Pipe fusion equipment
Drill rods
Reamers
Hole openers
Mud recycling systems
Tracking and locating equipment
Rock drilling attachments
Tool trailers
Generators
Compressors
Many contractors mistakenly insure only the primary drill rig while overlooking expensive support equipment and tooling.
If your operation includes directional drilling equipment, you may also want to review our guide on Boring Equipment Insurance: Covering Directional Drills, Auger Bores, and Tooling for a deeper look at equipment-specific exposures.
Inland Marine Insurance: The Core Coverage
Despite the name, inland marine insurance has nothing to do with watercraft. It is one of the most common forms of protection used for contractor equipment.
For drilling contractors, inland marine coverage may help insure:
Equipment in transit
Equipment stored at a jobsite
Portable tools
Attachments
Mobile machinery
Coverage generally follows the equipment as it moves between locations rather than limiting protection to one physical address.
Because drilling contractors depend heavily on mobile equipment, inland marine insurance is often the foundation of their equipment protection strategy.
What May Be Covered?
Theft
Jobsite theft remains one of the most common concerns among drilling contractors.
Depending on policy terms, insurance may help cover:
Stolen drill rigs
Missing tooling
Stolen locating equipment
Theft from secured storage yards
Equipment stolen from trailers
Documentation such as serial numbers and equipment inventories often becomes important during the claims process.
Fire Damage
Fire can damage equipment stored in yards, shops, trailers, or jobsites.
Covered losses may include:
Drill rigs
Fusion equipment
Generators
Tooling
Electronic locating systems
Whether coverage applies depends on the policy and cause of the fire.
Transportation Accidents
Drilling equipment is frequently hauled across state lines and between projects.
Insurance may provide protection when:
Equipment trailers overturn
Loads shift during transport
Equipment is damaged while being transported
Coverage details differ by insurer and policy form.
Vandalism
Acts of vandalism may create significant repair costs.
Depending on policy language, coverage may apply to damage caused by:
Intentional destruction
Graffiti
Property tampering
Criminal mischief
Certain Weather-Related Events
Some policies may cover damage resulting from events such as:
Windstorms
Hail
Lightning
Certain severe weather incidents
Coverage varies by form and location.
What About Tooling and Attachments?
Tooling often represents a major investment that can be easily overlooked.
Examples include:
Reamers
Cutting heads
Pulling swivels
Hole openers
Specialized drill bits
Rock tooling
Tracking accessories
Some policies automatically provide limited coverage for attachments and tooling, while others require individual scheduling.
Before assuming coverage applies, contractors should verify how their equipment schedule addresses these assets.
What General Liability Insurance Covers
General liability insurance protects against third-party claims rather than damage to your own equipment.
For drilling contractors, this coverage may respond to allegations involving:
Property damage
Bodily injury
Jobsite incidents
Certain completed operations claims
Examples may include accidentally damaging a customer's property or a third-party injury occurring in connection with work operations.
General liability insurance typically does not pay to repair your own drill rig, tooling, or attachments.
What Commercial Auto Insurance Covers
Many drilling contractors operate:
Service trucks
Support vehicles
Pickup trucks
Flatbeds
Equipment hauling units
Commercial auto insurance may cover covered vehicle accidents involving owned business vehicles.
However, commercial auto coverage usually does not replace dedicated equipment coverage for directional drills or boring equipment.
Utility Strikes and Underground Damage
Directional drilling crews work in close proximity to critical underground infrastructure.
Even after obtaining 811 locates and following best practices, incidents can occur involving:
Fiber optic lines
Gas utilities
Power lines
Water systems
Sewer infrastructure
The responsibilities and potential insurance response depend on many factors, including contract language, utility markings, state requirements, and policy terms.
Contractors looking to reduce utility strike risks should review guidance provided by United States 811 and the Common Ground Alliance, both of which publish resources focused on underground damage prevention and excavation safety.
What Most People Get Wrong
The biggest misunderstanding is believing that every item attached to a drilling machine is automatically covered because the primary rig is insured.
In reality, coverage often depends on how equipment is listed, valued, and scheduled.
We've seen situations where contractors carefully insure a directional drill but fail to account for thousands of dollars in tracking equipment, reamers, fusion tools, mud systems, and specialty attachments. When equipment values aren't reviewed regularly, coverage gaps can develop without anyone realizing it.
Common Exclusions Contractors Should Understand
Every policy contains exclusions.
Common exclusions may include:
Normal wear and tear
Mechanical breakdown
Corrosion
Rust
Manufacturer defects
Improper maintenance
Intentional damage
Certain pollution-related incidents
This doesn't mean these losses are never covered elsewhere, but contractors should understand exactly where coverage begins and ends.
Reviewing exclusions with a licensed insurance professional is always worthwhile.
Who May Require Proof of Coverage?
Insurance requirements are increasingly common in utility construction and drilling work.
Organizations that frequently request proof of coverage include:
General contractors
Municipalities
Utility companies
Telecommunications providers
Lenders
Project owners
Railroads
Government agencies
Requirements often include certificates of insurance (COIs), additional insured endorsements, or specific liability limits.
If you operate in Colorado, our guide on Colorado Directional Boring Contractor Insurance and Workers' Comp for Drill Crews explains several insurance considerations commonly encountered in that market.
What Affects the Cost of Drilling Equipment Insurance?
Several factors influence pricing.
Equipment Values
Higher insured values generally increase potential claim exposure.
Equipment Type
Insurers evaluate different risks associated with:
HDD rigs
Rock drills
Auger boring equipment
Fusion equipment
Tracking systems
Geographic Operating Area
Contractors operating across multiple states may present different risks than those working in a smaller territory.
Loss History
Previous claims often factor into underwriting decisions.
Security Practices
Many insurers evaluate:
GPS tracking
Equipment storage methods
Yard security
Theft prevention procedures
Types of Work Performed
A contractor installing fiber lines may present a different risk profile than one working on gas utility projects or municipal infrastructure.
How to Prepare for an Equipment Insurance Quote
Before requesting coverage, gather:
Equipment lists
Serial numbers
Equipment values
Photos of major assets
Business revenue information
Project descriptions
Claims history
Operating territories
Providing complete and accurate information helps an insurance professional properly evaluate the operation and identify potential gaps.
Frequently Asked Questions
Does drilling equipment insurance cover stolen rigs?
It may. Coverage depends on the specific policy, security circumstances, and cause of loss.
Are drill rods and reamers covered?
Sometimes. Certain policies include tooling and attachments, while others may require separate scheduling.
Does insurance cover damage while transporting equipment?
Coverage may apply under certain circumstances, depending on the type of policy and details of the incident.
Is mechanical breakdown covered?
Many equipment policies exclude normal mechanical breakdown. Contractors should review policy language carefully.
Do general liability policies cover my drilling equipment?
Generally, no. General liability primarily addresses third-party injury and property damage claims rather than damage to your own equipment.
Request a Free Drilling Equipment Insurance Review
Whether you operate a single directional drilling rig or manage an entire fleet of drills, tooling, trailers, and support equipment, understanding your insurance program is critical to protecting your business.
Excavating Insurance Partners works with drilling contractors, directional boring companies, utility contractors, excavation businesses, and site-work professionals throughout the United States. If you'd like help reviewing your equipment coverage or identifying potential gaps, contact Excavating Insurance Partners for a free, no-obligation quote review and equipment insurance consultation.
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