Tools and equipment insurance for tradesmen provides continuity cover for small businesses in as much as it replaces lost or damaged items and allows trade to continue. This type of cover is rarely sold as a standalone product but is often attached to a standard combined tradesman liability package as an optional extra.
Every type of tradesman will have a collection of tools that are unique to their trade, whether it be a set of paintbrushes for a painter and decorator, a mobile phone and a laptop for a real estate agent or a high-powered vacuum cleaner for an industrial office cleaning contractor.
Without these tools a tradesman cannot perform their trade and the cost of replacing all the essential working equipment in one go, due to a loss, could cripple a small businessman who has built up a set of unique tools over the years. All tools are at risk of theft, loss or accidental material damage, some more than others dependent upon the trade type.
By the very nature of their work, tradesman in the course of their daily business activities are required to travel to various clients premises. The risk of loss or damage to their tools is highly dependent upon the type of working environment that the tradesman finds themselves in and also the desirability and value of the tools they use. Insurance companies take these ‘risk exposure’ considerations into account when calculating premium rates for each different type of trade.
For example, the risk of loss of an expensive electric hand-held woodworking drill is far less if a carpenter or joiner is working in a private domestic premises as opposed to on a large building or construction site. On a building site there will be less security and many different people and workers coming and going with an opportunity to steal tools and equipment. Tradesman need to be extra vigilant for theft and most policies will exclude claims for the loss of tools left lying around, unsecured in the open.
A standard tools insurance policy will cover loss of or damage to hand tools and hand-held portable tools owned or hired in by the insured or any person working manually in the business. Most tools insurance policies today will provide cover for mobile phones, notebooks and other electronic gadgets used in running a business.
Typical exclusions to cover are theft from unattended motor vehicles, loss or damage whilst lent or hired out, loss or damage from wear and tear, rust, breakdown, cleaning, repair or restoration. Many comprehensive tradesman insurance policies and packages will cover theft of equipment from unattended vehicles under a goods in transit section, however there usually has to be forcible or violent entry for a claim to be considered.
The level of indemnity cover required by a tradesman should be adequate to replace the tools and equipment as new, allowing for a reduction for wear and tear or depreciation. Often polices will limit coverage to a fixed amount per single item of equipment. Tradesman should also be aware when purchasing cover that excesses are applied per claim. In some cases where there is not a total loss, the excess amount when deducted from the indemnified amount, could exceed the value of the items lost.