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Whether you use them for building, fine-tuning, mending or demolishing, not a day goes by when you don’t put your tools to good use.
After all, you’ve used your tools to build a successful small business, so you’d be in big trouble if something ever happened to them.
Since your tools are your livelihood, it’s a good idea to include them in your business insurance coverage – just like you’d insure your commercial property or your van.
Read on to learn more about tool insurance and find out how you can give your tools the protection they deserve.
What is tool insurance?
Tool insurance is a type of insurance designed to protect the tools and equipment you need to do your job. Generally, a tool insurance policy will cover the cost of replacing your tools if they’re lost, accidentally damaged or stolen.
Depending on the specifics of your policy, you can get cover for hired tools as well as for those you own.
Tool insurance can cover a broad range of kit: from large-scale plant equipment to powered and non-powered hand tools. You may also be able to take out protection for essential electronics and stock in trade.
In short, if you’d struggle to do your job without it, tool insurance may cover it.
» MORE: What Does Tradesman Insurance Cover?
What is ‘tools in transit’ insurance?
Tools in transit insurance protects your tools while they’re being transported, loaded and unloaded.
With tools in transit insurance, your tools may also be covered if you keep them in your van overnight, assuming you’ve taken reasonable security precautions.
» MORE: Commercial Van Insurance Explained
What does tool insurance cover?
Tool insurance chiefly protects against damage, loss and theft. If your tools are lost or damaged because of something like a fire, flood or a break-in, your tool insurance should kick in to cover the cost of replacing them.
Depending on your level of cover, you might be able to protect up to £20,000 worth of tools from deliberate theft, vandalism or damage (so long as they’re not damaged because of your own negligence).
The specifics will vary depending on your policy provider, but your tool insurance could cover tools or equipment you’ve hired or bought on a hire purchase as well as the personal possessions in your toolbox (and possibly the box itself).
Your tool insurer may also be able to cover your kit while you’re out of the country – for example, if you’re travelling for work and you’ve had to bring your tools with you.
A key advantage of tool insurance is that it can cover a lot of bad scenarios. With the right policy, your business could be protected from the financial impacts of stolen sanders, lost lathes or damaged drills.
However, if you’re looking for insurance which will compensate you for the work you were unable to do while your tools were out of action, then that’s a different policy altogether.
In such cases, you need business interruption insurance, which can pay out if damage to essential equipment (because of an unexpected event) gets in the way of you earning a living.
What isn’t covered by tool insurance?
There are a few scenarios where you shouldn’t expect your tool insurer to pay out.
For example, you probably won’t be covered if your tools are put out of commission because of ordinary wear and tear. Instead, tool insurance is explicitly designed to protect businesses from unexpected events, such as if your van is broken into or there’s a fire or a flood at a worksite.
And if you buy a new tool, get back to the site and realise it’s faulty, this is a problem for the tool manufacturer or seller, not your insurer.
Plus, you won’t be compensated for damaged tools where you or your staff are at fault. And on a similar note, if you leave your tools unattended in your van for too long, your insurance may be invalidated, and you won’t get a payout if your stuff is stolen.
How much does tool insurance cost?
The cost of tool insurance usually depends on the specific needs of your business. In that regard, tool insurance is like almost any other business insurance policy.
When you take out a tool insurance policy, you should be able to choose the value of the tools that you want to protect. For example, you might decide to insure just £1,000 worth of tools, or you might opt for greater protection by taking out an insurance policy worth tens of thousands of pounds. In all cases, the more comprehensive your tool insurance cover, the more expensive your policy will be.
There are other factors which could affect the cost of tool insurance for your business. These include the type and value of your tools, where you store your tools and how often you transport your tools. The nature of your business could also play a role in determining the cost of tool insurance.
In short, the cost of tool insurance is likely to vary from one business to the next. However, as a general guide, tool insurance could start from just a few pounds a month.
Is tool insurance worth it?
Only you will know whether tool insurance is worth it for your business, taking into account the cost of your insurance policy, the value of your tools and the level of risk your tools are exposed to.
However, your tools may be at greater risk than you realise, with a recent survey by On The Tools finding that 78% of tradespeople have been victims of tool theft.
If you’re unsure about whether tool insurance is right for you, try working out how much it would cost you to replace all your tools if the worst were to happen.
If your business couldn’t afford to swallow that cost – or if you’d simply rather avoid forking out so much cash just to get back to where you started – then tool insurance could be worth it for you.
Amid an epidemic of tool theft, there’s never been a better time to take your livelihood seriously and protect your business with tool insurance.
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