If you’re in the construction business, you likely need tools to effectively do your job. But, traditional commercial property insurance may not protect your tools while they’re in transit or stored at your worksites. Moving items as well as storing them off-site comes with risks. One way to safeguard your tools is to carry tool insurance. Here is more detailed information on this topic.
How Much Does Tool Insurance Really Cost?
The medium monthly insurance premium for a tool insurance policy is $14. Policies with a $5,000 limit cost $169 annually. The median excludes the low and high outliers and thus is a better approximation of what you might pay.
But, your insurance costs will also hinge on several factors, including:
- Coverage limits
- Property value
- Industry risks
- Coverage type (open perils vs. named perils)
- Past claims history
- How frequently do you move your equipment
The best way to find the precise tool insurance cost for your equipment is by talking to an insurance agent who’ll help you evaluate your insurance needs.
What Does Tool Insurance Covers?
Tool & equipment coverage is a variant of inland marine insurance. It’s designed to cover movable equipment and tools wherever you’ve stored them. Typically, commercial property insurance only covers your equipment when kept within your premises. Your tool insurance policy will cover the cost of repairing or replacing tools that are damaged, stolen, or lost.
What Tool Insurance Doesn’t Cover?
Your tool insurance coverage won’t cover every incident. Here are situations where tool insurance either doesn’t cover or where your claim can be denied:
- The standard tool insurance usually doesn’t cover the usual wear and tear
- Tools over 5 years old may not be covered
- Tool insurance doesn’t cover damage resulting from deliberate misuse or breakage
- You may have to get a separate policy for your extremely high-value tools and equipment
How to Reduce Tool Insurance Costs?
While tool insurance coverage offers you a low-cost way of protecting your equipment, you can use various strategies to reduce your insurance costs even further. For instance, bundling coverage is a smart way of lowering your insurance rates. Instead of purchasing your various insurance policies from multiple insurers, most insurance companies will offer you a discount on your insurance rates if you purchase multiple policies from a single carrier.
Additionally, the type of your insurance policy will affect your rates. Named-peril policies only cover what’s explicitly listed in the policy. Named-peril policies also come with a list of specified exclusions. In other words, a named-peril policy will only cover damage that emanates from the perils that are specifically listed within the policy. In contrast, open/all-risk policies cover everything except the exclusions explicitly listed within the policy. Open-peril policies usually offer broader coverage and, therefore, attract higher premiums compared to named-peril policies. Your insurance rates will also hinge on your claims history, which is why you should prioritize safety. By instituting safety measures, you can prevent claims from preventable incidents.
How to Protect Your Equipment with Tool Insurance?
As a business owner, tool insurance coverage is one of the options available that you can use to protect your equipment. To protect your equipment with tool insurance, you should understand what it covers, determine the value of your tools, shop around for quotes, choose the right coverage limit, keep good records, take steps to prevent theft, and review and update your policy regularly.
How to Get the Right Tool Insurance Policy
With a tool insurance policy, you can protect your tools and thus ensure you don’t need to pay for the damage out-of-pocket. For a cost-effective and customized tool & equipment policy that will adequately protect you, contact us today at Artisan Insurance Solutions. Our agents are always ready to help you.