Mackay Insurance Blog
If you owned a brick-and-mortar business, you would want business insurance coverage to protect the premises as well as the contents.
But when your business is wherever you happen to be, and your professional tools and equipment travel with you from one appointment to the next, you need tool insurance that can travel with you and protect you wherever you are, day or night.
Mechanics tool insurance is not one of the better-known commercial insurance products, but it is also not the type of insurance you want to learn about only after your valuable tools and equipment have been stolen, damaged or destroyed.
In this post, learn timely information about mechanics tool insurance coverage, why you need it, when you need it and how to get it.
When Do You Need to Insure Your Tools?
When do you need to insure your tools? Is this insurance just for working professionals who use their tools and equipment as part of their career?
The short answer is no.
The longer answer is that tool insurance doesn’t just cover professional mechanics, contractors and businesses such as electricians or plumbers whose livelihood depends on their tools.
If you own a valuable tool collection for personal use, you can also benefit from tool insurance.
But Doesn’t Your Auto or Home Insurance Cover Tools and Equipment?
This is one of the most common misconceptions people hold about auto and home insurance policies!
Unless you have specifically requested a rider to cover valuable property such as tools and equipment, it is unlikely that either your homeowners insurance or your auto insurance policy will cover loss, theft, damage or destruction to your tools.
Even if you have a commercial auto insurance policy in place, this policy may not cover tools and equipment you transport, or your coverage limit may not be adequate to the full value of your tools and equipment.
What Does Tool Insurance Cover?
Tools and equipment insurance can vary depending on the insurer. In most cases, “tools” are belongings that are valued at $1,000 or less per item.
Common examples of tools covered under a professional tool insurance policy include hand tools, power tools, supportive gear (ladders, wheelbarrows, etc.) and safety gear (goggles, gloves, knee pads, etc.).
What Is Equipment Insurance?
If you also own equipment that you rely on to do your job, or if you have a personal collection of valuable equipment for projects or home safety, equipment insurance is a policy designed to protect your investment.
In most cases, “equipment” is defined as belongings with a replacement value of greater than $1,000.
Common examples of equipment covered under a professional equipment insurance policy include compressors, generators, backhoes, excavators, scaffolding and similar types of equipment.
Options for Ensuring Your Tools and Equipment Are Adequately Insured
If you are taking out an insurance policy as a part of your professional career, even a single day’s interruption could be costly for you.
So, as with any insurance product, it is important to set up your coverage in a way that fully safeguards your ability to get back to work quickly no matter what happens to the tools and/or equipment you rely on for your daily work.
Contractor insurance offers different options to address loss, theft, damage or destruction to your professional tools and/or equipment and also to the vehicle you use for work purposes.
Full replacement value versus market value
There are two ways you can be reimbursed for tools or equipment that have been lost, damaged, stolen or destroyed.
You can choose to receive the full replacement cost of the item (i.e., what it would cost you to purchase the item new) or you could choose to receive the market value of the item minus depreciation.
Rental reimbursement rider
It is not always easy to go right out and replace certain high-end tools and equipment. You may need to wait days or even weeks to obtain certain items.
A rental reimbursement rider can get you back to work quickly if you need to rent the required tools or equipment you need to do your job while you wait for the replacement items to arrive.
Commercial vehicle insurance
As mentioned earlier, if your business includes a mobile component, the vehicle you use also represents a valuable part of your business viability.
If that vehicle is also your personal vehicle, your personal auto insurance policy will NOT cover any claims that arise while you are using that vehicle for work purposes. You will need a commercial auto insurance policy to protect your vehicle when you are using it for work.
Even if you have a commercial vehicle that you use only for work purposes, you will still need commercial auto insurance to protect your vehicle as the business asset that it is.
Here again, it is important to review coverage levels with your broker to ensure your business is not interrupted while a claim is being processed.
How to Estimate the Total Value of Your Tools and Equipment
If you need help estimating the full or market replacement value of your tools and/or equipment, your Mackay insurance broker can help.
To get the process started, we invite you to create a complete list of your tools and equipment inventory.
Be sure to include carrying cases, safety gear, supportive gear, cleaning supplies, replacement parts and other items that you use to maintain your tools and equipment.
Get in Touch
Are you shopping around for an insurance policy that will cover your personal or professional investment in tools and/or equipment? We can help!
Contact us online or give us a call at 1-888-853-5552.