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As a contractor, you cannot complete a job to a T without your trusty tools nearby. And it’s also true that transporting to a site and using them involve certain risks like theft or damage that can cost you some money. So to stay protected in case of any damage to or from tools and equipment, business owners seek refuge in insurance policies. Read on to know more.

So, Are My Tools & Equipment Covered Under Commercial Insurance?

Yes, it does, but there are a few things you should know before signing that policy form. Firstly, your simple commercial insurance policy may not cover your equipment and tools. So you need to get the Contractor’s Tools and Equipment insurance. This one is specifically made to protect your tools in case they are damaged, lost, or stolen. Here are a few things covered under it:

  • Small tools
  • Mobile equipment
  • Toolbox
  • Some form of machinery 

This kind of insurance is typically designed for contracting and construction companies that do different on-site jobs. Depending on your policy, it can also cover items beyond equipment such as employee equipment, clothing, borrowed equipment, and small tools. 

However, all of the equipment needs to be specified in the policy contract to receive coverage. Plus, some companies also demand that the tools should not be over 5 years old or else they may not be covered. The policy can also pay for the damages that occur because of the covered equipment failure. 

For instance, if a conveyor breaks down while moving debris from the construction site and all of the dirt and mud falls down on the site, then the insurance company can also pay for the clean-up of the area. But you have to include this clause in the policy as it might not come as a default.

Will It Cover Rented or Borrowed Equipment?

This depends on the insurer you’re working with, but most of the time, borrowed or rented equipment is also covered under the Contractor’s Tools and Equipment insurance. Since a business can’t purchase every tool and equipment needed for the job (some can be very expensive or have minimal use), they rent it out. 

Insurance companies understand this, which is why they offer different coverage amounts to pay for the equipment damages on the job or during transit. This works both ways, meaning if the insured business rents out their equipment to someone, it will also be protected. 

However, be sure to go through your fine print with a magnifying glass to ensure everything type of equipment, use, and rent/borrow conditions are mentioned according to your needs.

Contractor’s Tools and Equipment Insurance Cost:

The cost is decided by the total coverage amount, which can range from a few hundred dollars to several thousand dollars. So when crunching the numbers for your policy, insurers often look at the following factors:

  • Industry risk
  • Equipment and tools value
  • Named peril vs. open peril (the first one involves coverage of specific tools while the second one is for all tools in general)
  • How often you move or use your equipment 

There can be some more considerations, and depending on your business type and risks involved, the monthly insurance premium cost will go up or down. To learn more about commercial insurance please be sure to reach out to our team at 860-684-5270 or visit our website at