Contractors Are Your Tools Insured

Contractors, Are Your Tools Insured?

Contractors need many different types of insurance, simply to protect themselves, their workers, and even their clients while on the job. However, insuring their tools can be something that simply slips their minds. This is problematic because those tools are not only expensive, and in some cases, irreplaceable custom items, but also because they are what the contractors use to make a living. No tools usually equal no paycheck.

Thankfully, there’s a solution to stolen or broken tools – insurance coverage. Plenty of contractors don’t realize that they can insure their tools, but after this, they’ll know better. And knowing is half the battle!

Tools and Equipment Coverage

Known officially as either tools and equipment coverage, or tools and equipment insurance, this is something that’s designed to assist small business owners, like contractors, in case something happens to the tools they use every single day. Without tools and related equipment, a contractor and their crew are unable to get the job done.

This coverage can easily be added to a business owner’s policy, and it’s designed to cover exactly as its title implies – the moveable tools and equipment that a contracting business owns and uses on a daily basis.

One Main Difference

A standard business owner’s insurance often covers things like vehicles and office and warehouse space, all of which are large and, with the exception of vehicles, not so easy to move around. Tools and equipment, on the other hand, aren’t very stationary. They can be stolen from the back of a truck or from a job site, end up being broken throughout the course of the job, or more.

When these tools disappear or are damaged, the tools and equipment policy kicks in, paying the replacement costs, or, at the very least, part of the replacement cost, if the tool has been used a lot and its worth has been prorated.

Coverage Limits

Of course, tools and equipment coverage isn’t designed to cover absolutely everything. The standard policy only applies to items that are worth less than $10,000. This means that most standard tools, such as cordless drills, screwdrivers, hammers, and so on, are covered. Larger pieces of equipment, like bobcats and skid steers, both of which usually cost upwards of $10,000, need to be insured under a different type of policy. With that said, smaller tools are easier to steal or damage, so it makes sense to have them all under one policy.

Insurance Cost Factors

Now for the good news. In general, tools and equipment insurance isn’t overly expensive. It’s usually a small add-on to a standard contractor or small business policy. With that said, there are some factors involved in the price of the insurance, such as general geographic area, where the contractor does business, and even how often the tools are moved around. All of these play a role in cost.

Remember that although your tools seem to be safe, it’s always a good idea to have the right insurance coverage in place, just in case. In the end, the loss of essential tools can lead to lost revenue, which is never a good thing.

Let Spivey Insurance help protect the tools that help you make a living.

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