Tool & Equipment Coverage: Why You Need It


Your contractor's tools and equipment are instrumental to your livelihood. If they get stolen or damaged, you won't be able to continue on a job until they are replaced or repaired. Without the right type of coverage, this can be costly. You can't afford the out-of-pocket expenses, downtime, loss of revenue, and potential damage to your reputation.

Your tools and equipment are vulnerable to loss as they are moved from one job site to the next. You might think your Commercial Property coverage will respond and pay for damaged or stolen tools and equipment. But this isn't the case. Your Property insurance will cover only tools and equipment in the building listed on your policy. It does not cover these valuable items while in transit, at a temporary location, or at the job site.

You Need Coverage That Goes with You

A Contractor's Tool & Equipment policy protects your tools and equipment on your property, job sites, temporary locations, or in transit. This is critical because most tool damage occurs on the job site, and most thefts arise during transportation.

Coverage applies to tools and equipment listed on the policy. This includes hand tools, such as saws, wrenches, and hammers; power tools, such as drills, nail guns, and jigsaws; and heavy equipment, such as excavators and backhoes. It will pay to replace stolen tools and equipment and for repair or replacement if they are damaged by a disaster like a fire, vandalism, or a work accident.

Talk to your agent about whether coverage is written on an actual cost value (ACV) or replacement cost basis. ACV replaces lost property at its original value, which may be much less than required when purchasing the same item and brand after a loss. Replacement cost reimburses you for the amount needed to replace your old item with one that's the same or similar when new.

A Contractor's Tool & Equipment policy helps get what you need to keep you and your crew on job sites after a loss.