Tools are essential to your work as a contractor, and chances are you’ve worked hard to save up for and buy your construction tools and equipment. These tools are also a target for thieves, meaning you could lose a valuable part of your business. Tools and equipment insurance can help to protect you and the equipment you’ve worked so hard to buy.
Tools and equipment insurance is designed for contractors and offers protection for your stolen or damaged items. This specialized coverage isn’t included in most commercial property insurance policies, which only cover inventory and equipment that’s kept at a covered location, like your business headquarters. A tools and equipment policy covers your equipment while it’s on the job site or in transit.
When you first sign up for a tool insurance policy, you will need to provide the insurer with a list of unscheduled and scheduled items. Your unscheduled items list will include tools and equipment that are worth less than $5,000. You’ll need to provide the total value for the items on the list.
The list of scheduled items includes high-value tools and equipment worth more than $5,000. These items need to be individually identified, and you need to provide the value for each. The more of these scheduled items that you have, the more your policy costs will increase.
When you buy insurance, you can buy a policy that’s based on your equipment’s actual value or replacement cost. If you choose an actual value policy, then if you file a claim for a loss, you will receive payment for the actual value of the item, which is equivalent to its price when you purchased it minus depreciation. In contrast, a replacement value policy will pay an amount that equals how much you would pay to replace that item with a brand-new one.
Your policy will have a coverage limit, which is the maximum amount it will pay out for the year. The policy will also have a per-item and per-occurrence limit.
Shopping around for tools and equipment insurance can help you find the best deal on the coverage you need. You can get free tools and equipment insurance quotes online today to start comparing your options.
Paige Cerulli Paige Cerulli is a freelance content writer and journalist who specializes in personal finance topics. She graduated from Westfield State University and brings more than a decade of professional writing experience to the ConsumerCoverage team. Paige’s work has appeared in outlets including USA Today, Business Insider, and more.
