Construction equipment and contractors tool coverage

If you run a construction or general contracting company, you know that protecting yourself with commercial general liability insurance is a necessity. What you may not know is that your tools and equipment also need insurance to protect against them being damaged, destroyed or stolen.

How many thousands of dollars worth of tools and equipment have you acquired for your business over the years? Even to get started, a significant investment in tools is usually required. For most contractors, tools insurance coverage is a must.

Contractors tools coverage

An important consideration when shopping for contractors insurance is tool coverage, which specifically protects the tools owned by your business, whether they are in your truck or at a job site. For insurance purposes, tools are generally considered to be items costing $2,500 or less. Examples of contractor tools you’ll want coverage for include:

  • Hand tools such as hammers, wrenches, crowbars, saws and screwdrivers
  • Power tools such as drills, heat guns, sanders, power saws and grinders
  • Contractor gear such as hard hats, goggles, gloves, knee pads, tool bags, belts and uniforms
  • Other contracting tools including shovels, wheelbarrows, ladders and cleaning supplies

Did you know that your personal vehicle policy does not cover tools and equipment being transported for business purposes? Imagine one morning discovering that the cargo trailer storing all of your tools has been stolen. With the right coverage, you’ll be reimbursed for the cost of new tools along with short-term rental tools to keep your crew working until you’re able to get permanent replacements.

Talk to one of our contractor insurance experts to learn more about tools coverage. We’ll be happy to advise you on how to best protect yourself and your business.

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Insurance coverage for construction and contractor equipment

From an insurance viewpoint, equipment is defined as items worth over $2,500. We’ll help to protect these more expensive pieces of equipment against theft and other types of loss. Equipment insurance usually applies to owned items, and there are options for coverage to be extended to rented, borrowed and leased equipment.

Examples of contractor equipment you’ll likely want fully insured include:

  • Compressors
  • Generators
  • Excavators
  • Backhoes
  • Scaffolding

Other contractor insurance options

Depending on the size and type of your operation, there are other valuable coverage options that may be important to have. Here are a few of them.

  • Replacement cost: This provides the replacement cost of any insured item, which could be very helpful for more expensive items. Otherwise, depreciation would be deducted from any claim.
  • Rental expenses: This reimburses you for equipment rental costs after an insured loss. If you have any equipment that could take weeks to replace, this is an important addition to your policy.
  • Installation floater: While not related to tools and equipment, this is still well worth considering as it protects materials left at a job site awaiting installation. Say you drop off windows to be installed but find them all vandalized and broken the next morning, an installation floater will make sure you’re covered.

There are many other options geared to specific types of contractors and specialized construction, such as crane operators, office trailer coverage and work on ice or soft ground, to name a few.

Do you need insurance coverage for your tools?

If you run a construction or contracting company, tools and equipment coverage is a necessity. Examples of contractors who should never overlook this coverage include:

Call today and speak with one of our commercial insurance experts. They can walk you through all the coverages that might make sense for your contracting business, and help you choose a package that balances protection and affordability.

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Frequently asked questions about tools and equipment coverage for contractors

Along with commercial general liability insurance, tools and equipment coverage is an essential part of any contractor insurance package. You simply can’t run your business without your tools, and so tools coverage is there to repair or replace your tools if they are stolen, lost or damaged in a fire or other insured event. The other great element of tools coverage is that it pays for short-term rental tools so that you and your crew can keep working after a loss.

Tools coverage is not sold separately. It is sold as part of a package of contractors insurance that can also include commercial general liability, commercial auto coverage and commercial property coverage. Basic contractors insurance packages, including tools coverage and basic liability, start between $650 and $20,000 a year, depending on the type of contracting you do.

Not really. When we talk about contractors insurance, we typically speak about the two together, but there is an important distinction:

  • Tools are hand tools like hammers, wrenches, screwdrivers and saws, small power tools like drills, sanders, power saws nail guns, and contractors gear like hard hats, gloves, tool boxes and belts.
  • Equipment refers to larger construction equipment, typically with a value over $2,500, including compressors, generators, backhoes, bulldozers and excavators.

All your tools are included if you have tools coverage, whereas your equipment needs to be itemized individually in your policy to make sure it is covered.

More common than you might think. For some contractors, like carpenters, it is the most common type of insurance claim.

Your business is unique, so are your insurance options.

Being a brokerage for over 70 of Canada’s top insurance companies means our commercial brokers have access to a wide range of coverage options as unique as your business – at some of the best rates in Ontario. We sweat the details so you can focus on your business. Want to learn more about the coverage options available to you? Here’s a few of them.