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Contractors Tools and Equipment Insurance

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Protect Your Tools With Contractors Equipment Insurance Coverage

If you’re a contractor, then you know that your tools and equipment represent a sizeable investment. You need these items to get the job done, but unfortunately, they also leave you prone to losses.

Even the most careful contractor can’t always protect them from accidents, theft, or damage—which is why having contractors’ insurance is vital.

With contractor’s insurance, you can protect your tools and the income you depend on. From comprehensive coverage of your equipment to peace of mind, here are all why contractors need to ensure they’re properly insured.

Get a Quote from our commercial insurance experts at The Allen Thomas Group now.

Table Of Contents

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Understanding Tools and Equipment Insurance Coverage

equipment insurance for small business

Having a solid understanding of what is covered by tools and equipment coverage is essential for any business owner. Without this knowledge, the policy’s full value will not be realized. The specific items covered are often determined at policy issuance but commonly cover tools, equipment, and/or other related property. This may include any items purchased exclusively for the purpose of construction or service-related work, along with any company vehicles used to deliver services.

It’s important to remain aware that this type of insurance does not provide coverage for tools or equipment that are lent out to clients or third-party contractors. Additionally, in many cases, coverage will only include a set percentage of the cost associated with replacing damaged equipment o items lost due to theft, fire, or other external forces. It can be argued that this limits the amount of protection offered, as businesses would have to cover any costs that go beyond these predetermined limits.

On the other hand, many of these policies can also provide reimbursement for lost income and extra rental expenses should store materials need to be replaced quickly – something that can be invaluable, especially after a workplace disaster.

This highlights how vital it is to read through all available insurance options before signing anything with the insurance company. Once a business owner has gained an overall understanding of what is being offered and what falls within their scope of expected coverage, they can move forward by selecting a policy that is best suited for their construction-based company.

In conclusion, with well-researched information on insurance, businesses can hope to find the perfect fit for their business needs. By being aware of what exactly is or isn’t covered under the policy terms and conditions, businesses are ensured effective solutions when confronted with unexpected losses or damages. Understanding how different types of protection might benefit various scenarios sets the stage for the next step in learning more about the various types of equipment tools covered under such policies.

Typical Coverage and Options

When it comes to the many types of tools and equipment typically covered under contractors insurance, these policies are designed to cover essential pieces of equipment used in your business. Depending on the policy, some of the most common items covered may include measuring devices and instruments, such as tape measures, levelers, earth augers, saws, hammers, air compressors, generators, hand tools like screwdrivers and pliers, power tools like drills and sanders, ladders and other construction materials.

Some policies may even go beyond physical property to cover items that are not tangible, such as attachments or progress payments that are being held in trust by the contractor for a client.

To ensure that your policy is accurate, it’s important to have a reliable inventory list of all the equipment you use in your business. Going through this exercise will allow you to be sure you’re adequately covering all of your valuable assets. This list should include brand names and model numbers as well as serial numbers, if applicable.

With this list in hand, you can work with your broker to determine coverage limits that meet your needs and determine how much coverage is necessary for each item included in your contractor’s insurance. It’s also important to regularly update your inventory list every few months or so since new employee tools tend to get added to the mix frequently due to upgrades or improved technology.

Given these considerations, it’s important to understand which specific tools you use daily for your contracting business so when your looking into equipment insurance, you can make sure they are all listed correctly and receive adequate coverage for their replacement value. This way, if any damage were to occur due to theft or an accident, you know they will be replaced quickly and easily, and you may not have to bear the replacement cost.

By understanding what types of tools are typically included in insurance and ensuring that all applicable items on the job are correctly listed on the policy itself, you can be sure you have the right type of coverage in place in case anything unexpected happens down the line. 

It is important for contractors to consider insuring their tools with insurance. Keeping your tools and equipment safe is an investment in the success of your business, as without these resources, you would be unable to carry out projects and thus not able to earn income. Equipment insurance is designed to replace any damaged or stolen employee tools and clothing, helping to protect your profit margins from significant losses due to unexpected events.

On the other hand, there may be some that argue against insuring their tools. While in some cases, the cost might outweigh the potential risks presented by not being insured, it is important to recognize that any investments made in insuring heavy equipment can help reduce costs should anything happen to them. By investing in insurance, you will be safeguarding both yourself and the project(s) you are working on for a client, thus ultimately reducing the chances of enduring substantial costs over time.

For example, if many expensive pieces of machinery were damaged due to a storm or theft, it could have a major impact on a contractor’s ability to complete the project they are working on, as well as costing additional money to replace or repair the lost items. On the other hand, if those same pieces of machinery were insured by a contractors equipment insurance policy, then repairs or replacements would be covered by your insurers at minimal cost.

In conclusion, there are many benefits for contracting businesses when investing in this type of insurance. Therefore, when weighing up your options, it is important to consider both sides of the argument before making a decision.

As discussed earlier, this type of insurance can provide tremendous financial protection for businesses that want reassurance that their investments will remain secure regardless of what life throws at them.

By understanding the types of tools and equipment covered by insurance, you can start to determine which option is right for your business – so that you can make sure future projects remain profitable even in difficult circumstances. 

Equipment insurance is a type of inland marine insurance that offers transit coverage when you bring tools and equipment over land.


The cost of tools and equipment insurance for contractors, like any other insurance product, is one of the most important factors that need to be taken into consideration when deciding whether to purchase a plan. It may come as a surprise to many, but in some cases, the cost of insurance is much lower than you might expect.

In a typical transaction, the monthly fee for such coverage would depend on several different factors. These could range from the value or amount of the tools insured, the type of tools, how old they are, and even where they are stored.

As with any insurance, it is important to weigh up the potential costs against the value and importance of what you’re insuring. At first glance, some may find certain policies too costly and consider forgoing any coverage at all. However, this might lead to significant financial losses if anything were to happen to your tools of the trade.

If you are wondering whether to go for equipment insurance, it comes down to understanding your individual needs and assessing what choices best suit your budget and requirements. But before making any decisions regarding what coverage constitutes a wise investment, it’s necessary to have reliable information on calculating the cost of the policy itself, whether you rent equipment or purchase new tools.

We shall dive into this more in-depth in our next section as providing estimates is paramount in understanding what must be accounted for when choosing contractor’s tools and equipment coverage that suits both your budget and business needs alike. 

When it comes to calculating the cost of an insurance policy, many variables come into play. The amount of coverage needed, the risk profile of the contractor and their team, the size of their business, and their history with similar policies all factor into the final cost.

While it may seem surprising at first, contractors ultimately benefit from investing in comprehensive insurance plans. That’s because the financial benefits gained from having adequate coverage far outweigh the costs associated with policy premiums.

Though deterred by high costs, some contractors opt for cheaper, bare-bones insurance that offers little protection against expensive contractor’s equipment damages. These policies can become financial roadblocks when disasters occur due to insufficient coverage.

In such cases, contractors are often forced to pay out-of-pocket expenses in order to cover the remaining damages. This approach is costly in both time and money as it results in expensive repair bills that are not covered by insufficient insurance plans – which defeats the purpose of having any coverage in the first place!

Ultimately, however, choosing the right policy can be incredibly beneficial for contractors looking for financial stability and security during uncertain times. When calculating the cost of a comprehensive policy designed specifically for tools and equipment, one should always take into account various factors such as the amount of coverage needed, the contractor’s risk profile, business size, and past experience with similar policies. Such an approach will not only save them time but also money by ensuring they’re not left paying out of pocket when disaster strikes.

While balancing expense versus protection can be difficult, understanding that a proper policy comes with multiple benefits is key to making sure that your tools and equipment are safe and secure down the line. While there is no “one size fits all” solution to calculating the cost of insurance for your firm, weighing all aspects of your situation will be critical in finding the coverage you need. 

Equipment insurance is a type of policy designed to cover small tools and equipment. This includes newly purchased equipment, construction tools, and rented or borrowed equipment.

Equipment insurance provides many benefits to contractors working on any job.

As a contractor, you should know that the right equipment insurance provides financial help. It is a protection for employee tools or clothing and equipment, particularly when you work with valuable assets that require coverage. While there can be an initial cost associated with getting proper coverage, the long-term benefits typically outweigh the costs. 

Equipment insurance can cover your business against losses or damages caused by accidents or disasters like theft, vandalism, fire, etc. This coverage also extends to situations where you have rented tools, and they get damaged.

In addition to the financial protection the insurance provides, having contractors’ equipment insurance can also help you protect yourself from any liability claims for injury or property damage that may arise as a result of using your machinery while on the job. With this kind of coverage for equipment, it is easy to manage potential claims by providing a reliable source of financial protection should something go wrong on a job site.

Further, getting proper tools and equipment insurance can provide peace of mind, knowing that you’ve taken all the necessary steps to protect yourself while working on different jobs fully. By investing in a policy upfront – rather than waiting until after an accident has happened – you’re ensuring that you have the right type of coverage for whatever comes your way. It’s better to be safe than sorry – even if it means spending a little more money upfront on an appropriate policy – when it comes to protecting your livelihood and the work you do each day.

Overall, equipment insurance protects any contractor working with valuable assets that need adequate protection from potential risks or losses. Whether it’s protecting yourself from damages caused by natural disasters or putting together a plan to handle liability claims from using your equipment on a job site, having proper coverage in place is essential to your business’s safety. Equipment insurance covers a wide range of risks and will help keep your business running. 

Tools and equipment insurance provides the best coverage for theft of tools. But it doesn’t cover electrical or mechanical breakdown, for which you may need equipment breakdown insurance.

Common Questions About Contractors Tools and Equipment Insurance

The common exclusions for tools and equipment insurance include:

  • Damage caused by war, nuclear radiation, or terrorism
  • Damage resulting from illegal activity
  • Damage caused by false representation or fraudulent acts
  • Property that has been purposely destroyed or stolen to be used in the furtherance of a criminal act.

Generally speaking, these exclusions are designed to protect an insurer from potential financial losses due to illegal or fraudulent activities.

Some policies may also exclude damage from natural disasters such as floods, earthquakes, and hurricanes. Ultimately, it is important for contractors to read and understand their insurance in order to ensure they are properly covered in the event of an unexpected loss.

Yes, it is possible to get coverage for items stored on the job site. Contractor insurance is designed to protect against damage to tools due to theft, fire, or other causes. This includes equipment you rent or borrow. Coverage can vary and may include any tools or equipment used by the contractor while performing their work. 

Commercial contractors equipment insurance can also cover any materials stored on the jobsite at the time of the incident. Depending on your policy type, this coverage may even extend to rental equipment kept onsite. It is important to review your policy carefully to ensure you know all property that could be covered in the event of a loss.

When you get coverage for tools and equipment, you can avail of many discounts available. Depending on the type of tools and equipment you need to insure, your insurer may offer a range of discounts, such as volume discounts for insuring more than one piece of equipment or tools at once. 

Insurers may also offer loyalty discounts if you renew a policy or switch to them from another insurer to get coverage essential to your business. Additionally, some insurers offer discounts for certain trades and professions that utilize specific types of tools and equipment. Make sure to ask about all potential discounts before committing to one insurance provider.


Contractors’ tools and equipment insurance typically covers a broad range of equipment, from mobile machinery to hand tools, power tools, and general building materials. This coverage will provide protection against physical loss or damage to the items owned by the contractor, whether from theft, fire, or some other form of peril.

Coverage often also extends to rental equipment that has been leased by the contractor for use on a specific job.  It covers tools and equipment purchased by the contractor. In addition, it may include items such as temporary structures and scaffolding used for the duration of the project.

It typically does not cover perishable items or supplies that are specifically meant to be used up in one project—such as paint or lumber—but rather those items that can be used for multiple jobs over time.

In order to have a successful claim for contractors’ tools and equipment insurance, there are a few key requirements that must be met. Primarily, in order to protect the tools and equipment, you must have purchasing documentation, such as a receipt or invoice that clearly shows the date of purchase, the manufacturer’s information, and the model number. Additionally, proof of ownership should also be provided.

Furthermore, it is important that the appropriate premium rates for the type of coverage required are paid in full before any claims can be made. This will help ensure that the policyholder receives the maximum benefit from your insurance provider should you ever need to file a claim for loss of your tools and equipment. Finally, regular maintenance of all tools and equipment should also be fully documented with photographs or videos taken prior to submitting any claims.  

  • According to, the average national cost for tools insurance is $164 per year.

  • The Experian Credit Report found that the average annual premium for equipment insurance ranges from between $100 and $500.

  • A survey conducted by ROI Advisor in 2021 revealed that the majority of contractor businesses spend between 1% to 2% of their gross revenue on insurance costs, including equipment.

  • Alabama
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  • Georgia
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  • Indiana
  • Kentucky
  • Michigan
  • Nevada
  • New York
  • North Carolina
  • Ohio
  • Pennsylvania
  • South Carolina
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  • Virginia

Get Your Contractor Certificate of Insurance Now From The Allen Thomas Group Insurance Agency

insurance agency for contractors equipment policy

If you have a general liability insurance policy, you can take tools and equipment insurance as an add-on to minimize business interruption.

So, if you’re a small business owner in need of contractors tools and equipment insurance, look no further than The Allen Thomas Group.

With our comprehensive coverage, streamlined claims process, and commitment to excellence, we are happy to help.

Don’t leave your success to chance – choose our comprehensive insurance options for contractors today.

Protecting your business is easier with the contractors equipment policy that you can use for your business tools and machinery. Get help today!

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