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What is Tools and Equipment Insurance?
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What Does Tools and Equipment Insurance Cover?
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What Doesn’t Tools and Equipment Insurance Cover?
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Who Needs Tools and Equipment Insurance?
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How Much Does Tools and Equipment Insurance Cost for Small Businesses?
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Why is Tools and Equipment Insurance Important for Small Businesses?
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What Does a Typical Tools and Equipment Claims Process Look Like?
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FAQs
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Get Tools and Equipment Insurance Today!
What is Tools and Equipment Insurance?
Tools and equipment insurance, also known as contractor’s equipment insurance, protects company tools and machinery from damage or loss. This policy extends to a variety of tools such as portable tools, heavy machinery, power equipment, as well as leased or borrowed tools, depending on the specifics of your policy. If your equipment is lost, stolen, damaged or destroyed as a result of an unforeseen event, tools and equipment insurance can assist you in repairing or replacing them, keeping your projects on track.
What Does Tools and Equipment Insurance Cover?
Tools and equipment insurance typically covers the following events:
- Theft
- Vandalism
- Accidental Damage
- Vehicle-Related Damage*
*Tools and equipment damaged in vehicle-related events may or may not be covered depending on your specific policy’s details.
It works by covering the losses or damages of the following types of equipment and tools:
- Handheld Tools (drills, saws, hammers, etc.)
- Power Tools (nail guns, electric saws, cordless drills, etc.)
- Heavy Machinery (excavators, bulldozers, forklifts, etc.)*
- Measuring Tools (tape measures, levels, etc.)
- Construction Equipment (ladders, scaffolding, etc.)
- Safety Equipment (hard hats, ear protection, safety glasses etc.)
- Electronic Equipment (computers, laptops, GPS devices, etc.)
- Rented/Leased Tools*
- Borrowed Tools
- Storage Equipment (containers, toolboxes, etc.)
- Specialized Tools (used for specific trades like plumbing or surveying tools).
*Depending on the specifics of your policy, heavy machinery and rental equipment may or may not be covered.
What Doesn’t Tools and Equipment Insurance Cover?
Tools and Equipment insurance usually does not cover the following:
- Rust or Corrosion
- Normal Wear and Tear
- Intentionally-Caused Damage
- Negligent-Related Errors (such as ignoring manufacturer instructions)
- Natural Disasters (events like hurricanes, flooding or earthquakes require separate, standalone policies)
- Manufacturer Defects
- Loss Without Evidence of Theft
Who Needs Tools and Equipment Insurance?
Tools and equipment coverage is essential for any professional that utilizes tools or machinery in their daily operations. This includes:
- Contractors
- Carpenters
- Construction Companies
- Landscapers
- Electricians
- Plumbers
- HVAC Technicians
- Cleaning Businesses
- Concrete and Cement Companies
- Janitorial Workers
Even if you are not one of these professionals, but you rely on tools and/or equipment to generate income and run your business, we recommend investing in a comprehensive policy.
How Much Does Tools and Equipment Insurance Cost for Small Businesses?
The average cost of a tools and equipment insurance policy for a small business costs between $14 to $50 per month. Here are some factors that affect the cost of a policy:
- Industry: The more risks that are involved in a certain line of work, may increase policy costs.
- Policy Limits: Premiums tend to increase, as coverage limits increase.
- Equipment Cost/Type: Expensive equipment generally costs more to insure.
- Claims History: Prior claims raise rates (the industry as a whole also factors in).
- Location: Rates may rise if operating in an area that experiences high rates of theft.
- Deductibles: In general, the higher your deductible, the lower your monthly premium will be. Keep in mind that with a high deductible, you’ll have to pay more out of pocket in the event of a claim.
Why is Tools and Equipment Insurance Important for Small Businesses?
While some tools and equipment are easy and cheap to replace, others are quite expensive. In the case of an unfortunate accident where your equipment is damaged or missing, smaller companies in particular oftentimes can’t afford to replace them out of pocket. This is where tools and equipment insurance comes in. By investing in a policy, you’ll be able to:
- Avoid costly project delays.
- Minimize loss caused by theft or damage.
- Protect expensive, specialized equipment or tools.
- Build trust with clients, by keeping projects on schedule.
What Does a Typical Tools and Equipment Claims Process Look Like?
If an incident occurs to your tools or equipment and you’re insured, here’s what you can expect for the process to look like:
- Notify the Insurer: As soon as the damage, theft or loss is discovered, it’s crucial to notify your insurer as soon possible.
- Document Relevant Proof: Photos, videos, receipts proving ownership, invoices for repairs, and police reports are all relevant documents that should be gathered. The more documentation you can gather, the better!
- File the Claim: Get in touch with your insurer, whether it’s by calling your agent or filing the claim online. During this step you’ll likely need to provide all of the documentation you’ve gathered as well as other particulars regarding the incident such as the date and supporting details.
- Insurer Investigation: Your insurer will review the claim to reveal the extent of the damage or loss and the validity of the matter. This may include an insurance adjuster traveling to the site of the incident.
- Approval and Calculation: If the insurer approves your claim, they will then calculate the amount of compensation that you’ll ultimately receive. This figure takes into account the value of the equipment and tools, as well as your policy details like limits, and deductibles.
- Payout: Once approved, you’ll receive the funds. Keep in mind that these funds must be used to either repair or replace the damaged or stolen items.
FAQs
Can Tools and Equipment Insurance Be Combined with Other Coverages?
While tools and equipment insurance can be purchased as a standalone policy, many insurers also include the option to bundle it with other coverages. Common insurance bundles include:
- Business Owners’ Policy (BOP): While BOP insurance typically includes general liability and property insurance, many insurers offer the option to add on tools and equipment insurance as an endorsement.
- Contractor’s Package: An insurance bundle specializing in covering risks associated with contracting work and other similar professions. It usually includes a combination of liability insurance, workers’ compensation, commercial auto insurance, and equipment coverage.
Does Tools and Equipment Insurance Cover Rentals or Borrowed Equipment?
Tools and equipment insurance will oftentimes cover rental, leased and borrowed equipment if it is damaged or stolen, but it depends on your policy’s specific details. In other cases, insurance plans will require you to add endorsements onto your policy, like specialized rental protection, to extend the scope of coverage. To ensure that you understand what your policy includes be sure to read through the coverage details, and speak with your insurance agent if anything remains unclear.
Is Tools and Equipment Insurance and Inland Marine Insurance the Same?
A common misconception about tools and equipment insurance is that it provides the same coverage as inland marine insurance, that’s simply not true. While they do offer some similar protections, here’s how they differ:
- Inland Marine Insurance: Similar to tools and equipment coverage, inland marine insurance protects property such as equipment, tools, inventory and materials while they are being transported from one location to another. This includes modes of transportation like trucks, trains and ships. Additionally, this type of coverage often offers higher coverage limits to protect valuable equipment.
- Tools and Equipment Insurance: On the other hand, tools and equipment insurance covers tools, equipment and machinery if it is damaged or stolen during daily operations or on the business property.
Get Tools and Equipment Insurance with EZ.Insure
At EZ.Insure we recognize the critical role that your tools and equipment play in your company’s success. That’s why we make it easy for you to find affordable coverage that fits your specific needs.
Our user-friendly platforms offer free quotes, side-by-side plan comparisons and live expert assistance to answer any questions you may have. Don’t go unprotected any longer. Instead, get the coverage you deserve so your business can prosper for years to come.
To get started, just enter your ZIP code below or call us directly at (855)-694-0047.