Insurance Coverage for Your Tools


In construction and contracting, your business is only as secure as your tools are. Compare quotes on Ontario coverage from over 40 insurance companies.

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Construction Equipment and Contractor’s Tool Coverage

If you run a construction or general contracting company, you already know that protecting yourself with contractor’s liability insurance is a necessary cost of doing business. What you may not know is that your tools and equipment are not fully covered or covered at all if they are stolen.

Insurance Coverage for Contractor’s Tools

How many thousands of dollars worth of tools and equipment have you acquired for your business over the years? Even to get started, a significant investment in tools is usually required. That’s why an important option to consider is a tool floater, which specifically protects the tools and equipment owned by your business whether they are in your truck or at a client’s location. And take note – your
personal vehicle policy does not cover tools and equipment being transported for business purposes. Imagine one morning discovering that the cargo trailer storing all of your tools has been stolen! At least you will be able to resume operations quickly with the right coverage in place.


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Insurance Coverage for Construction Equipment

First of all, what is the difference between tools and equipment? From an insurance viewpoint, tools are generally considered to be items costing $1,000 or less. That means equipment is defined as items worth over $1000 to acquire, like a generator, backhoe or an excavator for example. For these more expensive pieces of equipment, you will want to have these itemized in your policy for appropriate coverage for theft or other type of loss. Equipment coverage usually applies to items you have rented from a dealer or borrowed from another contractor as well.

Other Coverage Options

Depending on the size and type of your operation, there are some other options that could be valuable protection.

  • Replacement Cost: this gives you the replacement cost of any insured item, which could be very helpful for more expensive items
  • Rental Expenses: this reimburses you for the rental costs of equipment you rent due to an insured loss. If you have any equipment that could take weeks to replace, this could be an important addition to your policy
  • Installation Floater: this protects materials left at a job site to be installed but are damaged before you can do it. For example, if you drop off a number of windows to be installed but find them all vandalized and broken the next morning, an installation floater will cover this scenario

There are many other options geared to specific types of contractors and specialized construction, such as crane operators, office trailer coverage and work on ice or soft ground, to name a few.

To be sure you have the right coverage for your tools and equipment, talk with a commercial insurance expert. Feel free to contact Sean McNamara at Mitchell and Whale Insurance Brokers today at 1-800- 731-2228 or email me at smcnamara@mitchellwhale.com.

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