Tools and equipment insurance

Tools and equipment insurance protects the essential tools and machinery your business relies on every day. Standard property or liability insurance often does not cover mobile tools, equipment used off-site, or items stored in vehicles.

For many businesses, replacing stolen or damaged tools out of pocket can cause serious financial disruption.

What Is Tools and Equipment Insurance?

Tools and equipment insurance is a type of coverage that protects business-owned tools and equipment against theft, damage, or loss. It typically applies to items that are frequently transported, used at job sites, or stored outside a fixed business location.

This coverage is commonly structured as a form of inland marine insurance.

What Does Tools and Equipment Insurance Cover?

Coverage usually includes:

• Hand tools and power tools

• Machinery and specialized equipment

• Tools stored in vehicles or trailers

• Equipment used at job sites

• Property stored at temporary locations

Coverage applies whether tools are in use, in transit, or temporarily stored.

What Tools and Equipment Insurance Does Not Cover

Most policies exclude:

• Normal wear and tear

• Mechanical breakdown without damage

• Intentional damage or misuse

• Tools not listed or properly valued

• Vehicles themselves

Understanding these exclusions helps prevent uncovered losses.

Who Needs Tools and Equipment Insurance?

This coverage is essential for:

• Contractors and construction businesses

• Landscapers and lawn care companies

• Plumbers, electricians, and HVAC professionals

• Painters and remodelers

• Any business relying on mobile tools or equipment

If losing your tools would stop your business from operating, this insurance is critical.

Tools and Equipment Insurance vs General Liability

General liability insurance covers bodily injury and property damage claims involving third parties.

Tools and equipment insurance covers damage or loss to your own tools and machinery.

Both are necessary for full business protection.

How Tools and Equipment Insurance Works

Coverage may be provided as:

• Scheduled coverage for high-value items

• Blanket coverage for groups of tools

Claims are typically paid based on replacement cost or actual cash value, depending on policy terms.

How Much Does Tools and Equipment Insurance Cost?

Pricing depends on:

• Total value of tools and equipment

• Type of equipment

• Industry risk level

• Coverage limits and deductibles

• Claims history

For most businesses, the cost is far lower than replacing stolen or damaged equipment.

Common Claims Covered

Common claims include:

• Theft from vehicles or job sites

• Damage during transport

• Fire or vandalism

• Accidental drops or impacts

Without this coverage, these losses are often not insured.

How to Choose the Right Policy

To choose the right coverage:

• Create an inventory of all tools and equipment

• Use accurate replacement values

• Decide between scheduled or blanket coverage

• Review exclusions carefully

• Update coverage as equipment changes

Proper documentation speeds up claims and prevents coverage gaps.

Frequently Asked Questions

What is tools and equipment insurance?
It is insurance that protects business-owned tools and equipment from theft, damage, or loss.

Does tools and equipment insurance cover tools in a truck?
Yes, many policies cover tools stored in vehicles or trailers.

Is tools and equipment insurance required by law?
No, but it is often required by contracts and strongly recommended.

Does general liability insurance cover stolen tools?
No. General liability does not cover your own tools or equipment.

Is this the same as inland marine insurance?
It is often written as a type of inland marine insurance designed for mobile property.

Do small businesses need tools and equipment insurance?
Yes. Small businesses are especially vulnerable to tool theft and equipment loss.

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