Tools Insurance - Do I Need It?

Tools Insurance UK

Tools insurance covers the tools of your trade against accidental loss, theft, and some forms of damage, such as through fire or flood. It provides financial protection by covering the cost of replacing your tools so you can get back to work as quickly as possible. You'll need an effective and robust insurance policy to make sure you're fully covered.

This article will explain everything you'll need to know about the types of Tools cover you might need, as well as the typical costs you can expect to pay. If you still have questions, fill out a quote form to receive quotes from up to 5 insurance providers.

• What is Tools insurance?
• What does Tools insurance cover?
  • What doesn't Tools insurance cover?
• How much does Tools insurance cost?
• Common Exclusions
• FAQs

What is Tools Insurance?

Tools insurance pays to replace your tools if they’re lost, stolen or damaged in a way you couldn’t control, such as during a flood. Some tools, especially power and specialist equipment, can be expensive to replace, so Tools cover allows you to quickly replace them and get back to work.

Even if you’re diligent and safe with your tools, it’s always possible for mistakes to happen. Tools insurance is designed to mitigate any losses to your business in the event that something does go wrong, and while, primarily, it of course covers the financial value of any equipment, it’s worth considering the impact, both financial and otherwise, on your client if something happened and you couldn’t immediately cover the cost of replacement.

It’s sometimes referred to as Tools and Equipment cover or Equipment cover, and is very easy to set-up. Most providers will happily include it as an additional extra alongside your Public Liability insurance, and any form of specialist tradesman insurance is likely to include it either automatically or as a recommended additional coverage.

Who might benefit from Tools coverage

If you work as a tradesman in the UK, and own or use tools that would be expensive or difficult to replace, then it's absolutely worth considering a form of Tools insurance. Some trades this might notably impact include:

• Builders
• Electricians
• Gardeners
• Carpenters and Joiners

What does Tools insurance cover?

Policies vary from provider to provider, however you’re likely to be able to choose from a combination of:

• £1,000 to £10,000 of cover (specialist providers will likely offer more, up to £25,000)
• Goods in Transit, which can help keep your tools protected while you’re driving or transporting them
• Overnight tools cover, whether you leave them in your vehicle, secure lock-up or business premises overnight
• EU cover, useful if you ever take work in Europe

Do keep in mind that each policy is slightly different, so make sure you’re clear on what you are and aren’t covered for before signing up.

Tools Insurance Examples

• Your building company has some plant it leaves overnight at a client’s building site. Unexpected floods occur overnight and your plant is damaged.
• You leave your tools in your van parked on the street outside your house. Somebody breaks in and steals some of the more valuable equipment.
• While working on a client’s garden, an expensive set of hedge trimmers inexplicably go missing.
• There’s a small fire at your joinery, damaging your woodworking equipment. You can’t continue work until it’s replaced.

What tools are covered by Tools insurance?

Generally speaking, most items that we consider ‘tools’ should be covered by your policy. Your policy will likely ask you to specify whether you want to insure tools that are owned, rented or both before signing up so make sure you know what’s yours and what’s being loaned to you.

• Handheld tools: Hammers, screwdrivers
• Power tools: Welders, chainsaws, electric drills
• Heavy Equipment/Plant: Cement mixers, ground drills
• Equipment: Safety goggles, hard hats
• In-shop: Workbenches, bandsaw
• Business Equipment: Laptops, mobile phones

You’ll also want to be clear with your insurer if you’re intending to include any small vehicles, such as forklifts or tractors, within your equipment insurance. While they should in theory count as equipment some insurers won’t include them, so make sure to read your policy wording beforehand.

What isn’t covered by Tools insurance?

It’s important to be clear on the “loss, theft or accidental damages” tagline that a lot of providers choose to define their Tools coverage with, and what this does and doesn’t cover you for.

• Wear and tear
• Breakdown (mechanical/electrical)
• The plant not being secured to the ground correctly and damaged by wind, rain etc.
• Manufacturing issues
• Cosmetic issues (e.g. scratches, dents that don’t impact performance)
• Third parties
• Your business deliberately

Keep in mind that some of these issues will be covered by warranties you hold, and any damages you can prove were caused by a third party may be able to be claimed back from them, whether directly or through a legal case.

Your tools are also unlikely to be protected if they’re:

• Damaged or stolen while kept in an open-top/soft-top vehicle or trailer
• Reported stolen from a building but there are no visible signs of somebody entering the property.
• Stolen overnight from a vehicle due to an error on your part, such as leaving the vehicle unlocked or disabling any security devices.

How much Tools cover should I get?

The table and graph above show the cost of purely Tools insurance—our research indicated that you’re likely to find better prices if your Tools coverage is included in your Public Liability or in a Specialist policy—insurers naturally want to encourage you to take out more insurance with them and so offer discounts accordingly. If you have one of these policies already, and don’t have tools coverage, check with your provider to work out how much it might cost to add it to your existing policy and it’s possible you’ll get cheaper prices than those listed above.

Goods in Transit cover

You may also want to add Goods in Transit cover if you know your equipment is particularly liable to getting damaged while you're driving—perhaps you own a number of fragile tools or regularly drive on bumpy and uneven roads. Similarly to Tools cover, it's possible you'll find it more expensive to purchase a standalone Goods in Transit policy than simply adding it on to your existing coverage, but specialist providers will be able to offer you much larger values of cover, in some cases up to £50,000.

FAQs

What’s the difference between tools and plant?

Plant includes any heavy machinery such as cement mixers, skips and forklifts. It’s generally considered “non-portable” and therefore is often left on-site overnight. Tools are usually defined as anything that can be held by one person such as pliers, hammers or an electric drill.

Who is covered to use my tools?

If your business is covered with tools insurance, then anybody employed by the business is covered to use them. This could include (but isn't limited to)

In some cases, subcontractors your business brings in won’t be covered, however, so make sure to check with your policy provider if you do use them.

Your business won’t be protected if you let other businesses use your tools, whether as a favour or by renting them out—their business will need to be protected by an appropriate level of cover if you want to keep the tools safe.

Does it cover tools in multiple locations?

Yes, tools and equipment at any location that your business owns are protected provided the premises meets basic security requirements.

Are my tools covered if I leave them in my vehicle overnight?

Almost all providers will ask you to specify whether you'll be leaving your tools in a vehicle or a secure lockup/premises overnight. If you tell them you'll be leaving them in your vehicle, then yes, you'll be covered. However if you inform your provider you'll be leaving them in your lockup, and then something happens while you've left them in your vehicle overnight, you won't be covered.

For £2,000 of cover, adding protection for overnight vehicle storage adds around £20-£60 of additional annual cost—however if there's a chance you might leave them in your vehicle, even only occasionally, it'll be worth taking out the extra insurance.

My Tradesman Insurance or Public Liability Insurance already includes tools cover. Do I need another policy?

Make sure to double check the terms & conditions for your existing policy and that you’re happy with the coverage. Check some of the inclusions/exclusions mentioned above, and ensure you’re comfortable with what you’ve got. If you are, it’s unlikely you’ll need any additional cover.

What's a single article limit?

A single article limit is the maximum amount you can claim against a single item in the event of something going wrong. As an example, say you had £5,000 of Tools coverage, and a tool valued at £2,500. If your insurer included a single article limit of £2,000, then the maximum you could claim back against that tool individually would be £2,000, even if the total value of your claim was less than £5,000.

Ask your insurer before signing up to be sure if you do own any expensive tools.