Does my Contractors Insurance Cover my Tools?
A lot of contractors call our office asking if their contractor’s insurance policy covers their tools.
They think, of course, that it must. What insurance policy wouldn’t cover one of the most important and useful aspects of your business? As a contractor, without your tools you cannot perform the work you are doing!
Need coverage or a certificate? Request a quote or call (916) 967-7715. Lions & Coventry: est. 2009, licensed in all 50 states.
We educate our clients on what their policy covers, and they know the answer to this question when they get their policy.
Other insured’s, who work with different agencies, might not know the answer to this question. We have seen in many cases this gap in coverage not disclosed to contractors in an effort to keep their premium down. Or maybe it was mentioned, but not in a way to understandably expose the significant risk. This is because most Business Owners Policies (BOP) or Commercial Package Policies (CPP) will cover property that is housed at a specific business location, but does not always include the equipment and tools that travel with employees to be used at job sites.
So, how can you cover your tools with your insurance policy?
Inland Marine Insurance is a policy that, in its simplest form, covers equipment in transit. It is often purchased by companies that do freight shipping for a living, but is sometimes overlooked by those who travel with equipment as a part of their job.
If you’re not concerned with the replacement cost of your hammer, drills, or nails, consider the cost of the equipment you rent. A bobcat, or tractor, is a good example as these are commonly used by contractors. It is always an option to purchase insurance directly from the rental facility, but if you have your own policy in place, you can often set specific limits for rented equipment on that policy when you rent regularly, instead of buying coverage only from the rental yard.
And it isn’t just limited to contractors!
Say you repair computers, and you go pick up these computers from your customer’s houses – Inland marine can protect this equipment while it is in transit and in many cases while it is in your warehouse or repair shop.
When it comes to contractors, there are additional inland marine specialty policies you may want to consider. One example is Builder’s Risk. This type of coverage will protect materials and structures during new construction projects or renovations. An Installation Floater is another example of an inland marine specialty policy that may be a good policy to consider as well, as it will cover materials from the moment they are loaded into a truck until they are either installed or put to intended use.
Regardless, when it comes to your tools and your trade, have your insurance evaluated by a professional who understands your business. They can advise you on how to mitigate risks and find the policy that fits your business. Our experts are happy to help you at our office – simply give us a call at (916) 967-7715 for a free evaluation.
Lions & Coventry writes contractors insurance for licensed contractors and trades nationwide.
Contractor tools insurance FAQ
Does a business owners policy cover my tools at a jobsite?
Often only in part. A business owners policy (BOP) or commercial package policy is built around property at the business location listed on the policy. Coverage for tools and equipment away from that location is often limited or excluded, so check the off-premises and property-in-transit wording in your own policy.
What policy covers contractor tools on the job and in transit?
Inland marine coverage, usually written as a contractors equipment or tools floater (Insurance Information Institute). It follows your equipment to jobsites, storage yards and the road between them. Higher-value items are usually listed one by one, and small tools are often covered on a blanket basis. See our equipment insurance page for more.
Does my commercial auto policy cover tools stolen from my truck?
Generally no. A commercial auto policy covers the vehicle and your liability for driving it, not the tools or equipment carried inside it. Tool theft from a vehicle is normally handled by an inland marine floater. Some floaters limit theft from an unattended vehicle unless it was locked and shows signs of forced entry, so read that condition before you need it.
Can I insure equipment I rent or borrow?
Often, yes. Many contractors equipment forms can add coverage for equipment you rent, lease or borrow, usually with a separate limit. Compare it with the damage waiver the rental company offers before you sign the rental agreement.
Are my employees’ personal tools covered?
Not automatically. Many forms cover only property you own or are legally responsible for. If employees bring their own tools to the job, ask whether your policy can include employee tools, usually with its own limit.
What do I need for a tools and equipment quote?
A list of your tools and equipment with values, serial numbers for larger items, where equipment is kept overnight and how it is secured, any equipment you rent regularly, and your claims history. Request a quote or call (916) 967-7715.
Lions & Coventry Insurance Services was established in 2009 and is licensed in all 50 states (CA Lic. #0G22084).
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Tell us about your operations, locations, payroll or revenue, and the coverage or certificates you need. Lions & Coventry has placed commercial insurance since 2009 and is licensed in all 50 states (CA Lic. #0G22084).
