Tool insurance is essential cover for anyone who works in construction, or any related trades. Or indeed anyone who owns and uses tools as part of their work.
In this post we will outline what tool insurance is, and what it covers. We will also give a ballpark figure for the amount you might expect to pay for this cover.
What is Tool Insurance?
Tool insurance is cover for your tools and equipment. This can include handheld tools, including hammers, screwdrivers, and saws; and power tools, including drills, angle grinders, and nail guns. A tool insurance policy can cover your equipment whether you own it, lease it, or use a hire-purchase arrangement.
A policy may be extended to cover any plant machinery you might use as part of your work, such as excavators and bulldozers. Though some insurers may offer dedicated plant and machinery insurance instead.
It’s also possible to include cover for tools as part of a Contractor’s Policy or a Trades & Professions Policy, both of which provide broader cover for the business as a whole.
What Does Tool Insurance Cover?
Most tool insurance policies will provide cover for:
- Damage, theft, or loss (whether this is accidental damage or intentional vandalism or theft)
- Tools in transit
- Toolbox cover (i.e. cover for the equipment you use to store your tools)
- EU cover (for overseas jobs)
- Hired-in plant cover, for any equipment you hire, or buy on hire purchase
In addition, your tools insurance may extend to cover any other equipment you use as part of your job, such as ladders, your smartphone, your laptop, and so on.
What Does Tool Insurance Not Cover?
Usually, tool insurance will not cover ordinary wear and tear, or any deliberate damage caused by employees. Plus, if you need to replace a tool because it becomes faulty, this should be covered by your warranty, as opposed to your tool insurance.
Finally, while your tool insurance may cover tools you occasionally leave out of sight in a van overnight, it may not cover tools you keep in a van indefinitely. The policy may specify that the cover will not extend to any tools you keep in a van for 48 hours or longer.
How Much Is Tool Insurance?
The amount you pay for your insurance will vary from insurer to insurer. Some insurers may charge as little as less than £10 a month for tools insurance. But your premiums may be much higher, depending on your personal circumstances.
The more tools you need to cover, and the more expensive these tools are to begin with, then the more you will have to pay. You may also have to pay a higher premium if you routinely work in urban areas, or other locations with comparatively high crime rates.
How to Keep Your Tools Safe
If you take steps to keep your tools safe, it can help to bring down the cost of your tool insurance:
- Never store tools in a van for any longer than you have to. Try to keep them somewhere extra secure overnight and over weekends.
- Get extra security features for your vans and other vehicles, including alarms, locks, and immobilisers, to keep your tools safer both in transit and in storage.
- Register your tools’ serial numbers online, so that police can attempt to track them, and potentially recover them, following a theft.
- Try not to keep your tools unattended. Someone may steal them when you are not looking, or they may get exposed to hazardous conditions that could lead to damage or loss.
Is Tool Insurance Worth It?
If you work in construction or own high-value tools in your business, then tool insurance is a business necessity.
According to figures from Met Police, nearly 45,000 tools are stolen every year in the UK. Typically, each individual instance of tool theft costs construction businesses between £1,000 and £3,000, which does not include the costs associated with the disruption and delays that could arise from tool theft.
Plus, beyond theft, there is also the chance you could lose or accidentally damage your tools. It is no exaggeration to say that your construction projects simply will not be able to continue without the necessary tools of the trade. Repairs and replacements can be expensive, which is why tools insurance can provide vital financial support for construction businesses of all sizes.
Get The Specialist Construction Cover You Need From James Hallam
At James Hallam, we can help you protect your construction business with specialist risk management and insurance support.
We are an independent Lloyd’s broker with a dedicated team of experienced insurance professionals who are committed to getting you the specialist construction insurance you need at a competitive price, which can include comprehensive tools insurance.