Contractors like you rely on a variety of tools and equipment as you perform your job. Make sure you have adequate Tools Insurance as you protect your tools, equipment and livelihood.
What is Contractor Tool and Equipment Insurance?
Contractor tool and equipment insurance covers the hand tools, power tools and equipment you use in your contractor business. If these items suffer physical damage or are stolen, vandalized or affected by another peril, you can file a claim and receive reimbursement to buy replacements.
This coverage does not pay for general wear and tear from everyday use, but it can cover items you own, rent, lease or borrow.
Does it Matter Where you Store Your Tools and Equipment?
Your contractor tool and equipment insurance policy is active whether you store your tools at home, at your business location or at a construction site. It’s also effective as you transfer or transport your tools.
You may even file a claim if you rented or loaned your tools to someone, but be sure the rental or loan agreement is in writing.
For other coverage that may apply to your operations, consider Construction Contractors Liability Insurance.
Does Contractor Tool and Equipment Cover Other Items?
Your specific contractor tool and equipment insurance policy may cover a variety of items related to your business.
Examples
- Clothing you wear for your job, including tool belts and harnesses
- Debris removal and cleanup after an accident, such as an oil spill from your broken chainsaw
- Costs associated with expediting a project that’s affected by a covered loss
How Much Contractor Tool and Equipment Insurance Should you Buy?
Your policy limit depends on the value of your tools, so itemize and assign a replacement value to each tool and piece of equipment you own. You can then purchase enough insurance to cover your items.
Update your inventory regularly so you’re prepared if you need to file a claim.
How do you File a Claim?
To file a claim, contact your insurance agent. You may need to prove that a covered peril affected your belongings and that you were not negligent.
You will also need to pay the policy deductible, which is usually $500, and access your inventory list to document the exact worth of the compromised tools so you can receive reimbursement and return to work.
How do you Purchase Contractor Tool and Equipment Insurance?
Discuss your contractors tool and equipment inventory with your insurance agent and talk to your agent. They will prepare a customized policy based on your unique needs and give you valuable peace of mind as you protect your livelihood, tools and equipment.
Frequently Asked Questions
Will my policy cover tools left in an unattended vehicle?
It depends on the policy wording; many policies require tools to be locked and not visible to qualify for coverage.
Are rented or leased tools covered?
Yes—most policies cover tools you rent or lease, but you may need proof of the rental agreement and to notify your insurer.
Does coverage include replacement cost or actual cash value?
Your policy will specify whether reimbursement is replacement cost or actual cash value, so review the terms before a loss occurs.
What should I include in my tool inventory?
List each item with a description, purchase date, serial number if available, and current replacement value to simplify claims.