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!
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 get them the cheapest policy possible. 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 set specific limits on the rental coverage), and you rent this equipment regularly, you can save hundreds of dollars on insurance coverage costs.
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 is best for you. Our experts are happy to help you at our office – simply give us a call at (916) 967-7715 for a free evaluation.