Workers such as construction workers, electricians, installation technicians, and even those in the trade industry work mostly with tools. It is quite impossible to complete a job without your tools. Fixing damaged tools out of pocket is another unexpected expense on your finances. Getting tools and equipment insurance to prevent paying for unforeseen expenses on tools and equipment is a good idea.
Tools and equipment insurance is a type of small business insurance that handles the cost of repairing and replacing damaged tools and equipment. It covers expenses in terms of damage and theft. This insurance covers tools and equipment in events such as fire, theft, and so on.
Whether at a job site or another location, if your tools get damaged or stolen, this insurance covers all expenses related to your tool repairs. Tools and equipment coverage comes with different policies and covers different types of workers along with different types of tools and equipment.
Who Needs Tools and Equipment Insurance?
Small business tools and equipment at job sites and other locations need coverage for unforeseen events. Getting insurance for these tools is vital because they are not covered under your small business insurance policy, as well as damages encountered outside your location. Different types of businesses need this insurance. These businesses include:
- Appliance technicians.
- Concrete business.
- Electricians.
- Landscapers.
- Tree service contractors.
- Carpenters.
- Construction business.
- Installation businesses.
- Plumbers.
- Welders.
These businesses work mainly with tools and equipment. Getting insurance can help with damage financing.
What Does it Cover?
Tools and equipment insurance covers the repair and replacement costs of your company’s tools and equipment covered under your insurance coverage. Most tools and equipment policies cover events such as theft and fire.
Some policies cover borrowed equipment, but you may be required to pay more for coverage. Rented or leased tools and equipment may be covered under your policy, but unfortunately, not all policies offer this coverage.
Types of Events Covered
This insurance may be an open perils or named perils policy. Also, this means that your insurance policy may fall under any of these two policies. Below is an explanation of the two types of policies under tools and equipment coverage.
An Open Perils Policy
This type of policy covers damages to your tools and equipment from every possible issue except events that are excluded.
A Named Perils Policy
This covers damages caused to your tools and equipment from events stated in your policy, i.e., it only covers events stated on your insurance policy. However, this coverage is less expensive than open peril policies because they only cover chosen events.
Some of the events covered by tools and equipment coverage include:
- Fire.
- Lost items.
- Vandalism.
- Hail.
- Lightning.
- Theft.
- Wind.
Workers in these job aspects do need life insurance coverage over their tools and equipment.
Types of Tools and Equipment Covered by This Insurance
Tools and equipment coverage generally covers items valued at less than $10,000 and less than 5 years old. The list below is the type of tools and equipment this insurance covers.
- Blowtorches.
- Drills.
- Ladders.
- Nail guns.
- Protective gear like hard hats and flame-resistant clothing.
- Sanding power tools.
- Stand lights.
- Workbenches.
- Angle grinders.
- Chisels.
- Hammers.
- Laser levels.
- Oscillating multi-tools.
- Rakes.
- Saws.
- Wrenches.
All these and others are covered under tools and equipment policies.
What Does Tools and Equipment Insurance Not Cover?
Meanwhile, some events are not covered under this insurance. These events include:
- Damages caused as a result of rust, wear, and tear.
- If the item’s value is over $10,000 and it is over 5 years old.
- Work vehicles.
- Intentional destruction of tools by you or your employee.
- Heavy machinery or specialized equipment.
Workers who use items like this will not be covered in times of damage or theft. However, you may need to get a separate auto insurance policy for your work vehicle since it is not covered under this insurance policy.
How Much Does It Cost?
The average cost for tools and equipment coverage is $14 per month. The cost of your insurance policy depends on the below factors.
Industry risks.
- If you have a named or open peril policy.
- Your tools and equipment value.
- Also, how often your tools and equipment are moved.
- Deductible and coverage amount.
Using these factors, insurers can determine how much you are to pay on insurance policies.
