Everything you Need to Know about Construction Tools and Business Equipment Insurance
Don’t let a gap in coverage cost you your business.
As a contractor, your job is never in the same place for long. You go to your customers to help them solve an important problem. Whether your specialty is pouring cement, framing an addition, or painting you have a ton of tools and equipment that you bring along to the jobsite. Tools that you literally couldn’t do your job without. Did you know that these tools might not be covered with your current policy? A customized tool insurance policy can help protect your most important assets.
Why Insure Your Construction Tools and Other Business Equipment
Just like you insure your home, your car, and your bricks and mortar office (if you have one), it’s important to protect your construction tools and other business equipment. Tools like drills, table saws, and sanders add up. Let alone large pieces of equipment like skid loaders, excavators, or bulldozers. The cost to replace some or all of your tools and equipment could be astronomical without insurance coverage.
Tools and Equipment Insurance
To make sure your tools and equipment are covered, you need a specific tools and equipment policy. If you store your tools at home, your homeowners policy may not cover them. In fact, many homeowners policies specifically exclude construction tools and business equipment. Your General Liability and Commercial Auto insurance policies also probably don’t cover your tools and equipment. Because coverage is not automatically included in these other policies, it’s important to ask your agent for a separate quote.
Tools and Equipment Coverage
Speak to your agent about your specific coverage needs. Generally your tools and equipment policy will cover the following:
Stolen tools
Broken or damaged equipment
Loss of income due to damaged equipment or theft
Damage to borrowed equipment or employee tools
Tools and Equipment policies usually don’t cover rental equipment, so you may want to consider purchasing rental insurance when you sign the lease.
Small Tools and Equipment Insurance Cost
There are several things that impact the overall cost of your tools and equipment policy. Primarily, the value of your tools and equipment that are being covered. Newer tools and larger equipment have a higher value and will cost more to replace. Subsequently, the premium will be higher. However, a policy of $5,000 for small tools coverage starts around $300 for the entire year. Tools coverage can also be bundled with Installation Coverage and Leased Equipment for a few hundred more.
How to Protect your Construction Tools
A comprehensive insurance policy goes a long way to giving you peace of mind in case the unthinkable happens. Here are a few things you can do to make things easier in case you have to file a claim.
Keep a list of your items including date of purchase, make and model, and serial numbers.
Take photos or video of your tools and equipment.
Figure replacement costs compared to the actual cash value of your tools and equipment.
Only take what you need to the jobsite
Lock your vehicle, even on the jobsite.
Do not leave tools at the jobsite, even in a locked building.
Keep tools locked when not in use.
What to Do in the Event of a Loss
Even if you do everything to prevent it, a loss can still happen. Try not to panic (but it’s completely understandable if you do). Once the shock is over, follow these steps to get the most out of your policy.
File a police report. Regardless if it’s for a $500 or $15,000 loss, you’ll need to have a policy report number to file a claim.
Take pictures of the scene before moving anything.
In case of a theft, take pictures of the entry and exit of the scene. Look for damaged doors, windows, locks, etc.
Just like your other insurance policies, your tool and equipment insurance policy has a deductible, which is the amount you are responsible for in the event of a loss. This amount will be deducted from any insurance paid out for the loss. But if you’re filing a claim, it’s pretty likely that the cost to replace your stolen or damaged tools exceeds the deductible.
As a contractor, your tools are an extension of you. You can’t work if they don’t. You also can’t predict what will happen. Don’t be one of the many contractors who discover this gap in coverage until after they’ve already sustained a loss. Tools and equipment policies are generally pretty affordable and well worth the peace of mind. Be proactive and make sure you have an insurance policy that covers your most important assets - your tools and equipment! Contact me today for a personalized quote.
Are your tools and equipment adequately covered?
Getting your tools and equipment covered is simple. Reach out to my team to start a new quote or to have your existing coverage reviewed.
Have additional questions? Call us at 503-912-8839 or email me at mspivey@orrandassociates.com