Construction tools and equipment can be one of your largest investments in your contractor business. As you build up your inventory of specialty equipment, the need to protect these assets from theft, loss, and damage grows. Contractor insurance policies can help you protect your financial investment in your business, including the tools you need to get the job done.
Can Your Tools and Equipment be Insured?
Your insurance coverage can extend to protect your tools and equipment. There are a few different policies designed for this purpose.
Commercial Property Insurance
Commercial property insurance provides coverage for a building and permanently installed fixtures, machinery, and equipment. It can also protect your business's personal property, which includes furniture, fixtures, machinery, and equipment that is not permanently installed. Commercial property coverage can even extend to other people's property that is under your care or custody.
Commercial property is not intended to protect tools and equipment when they leave your premises, however. It also does not typically provide protection in the event of earthquakes or floods.
If you keep your specialized equipment inside a warehouse, this could be a good solution to protect it against damage or loss from theft, vandalism, fire, burst pipes, and storms.
Inland Marine Insurance
It's not uncommon for contractors to transport tools and equipment from one project site to another. Once your equipment leaves the protection of your insured building, it's vulnerable to theft, loss, or damage.
If you regularly transport your equipment and tools, inland marine insurance may be the answer to your transportation exposures. This specialty coverage is intended to protect your assets while they're on the move. It can also protect other people's property that's in your care and control.
Inland marine can protect your construction equipment against loss or damage from fire, lightning, windstorms, landslides, theft, and vandalism. It can also provide transportation-specific protection, such as collision, derailment, overturn of a transport vehicle, and bridge collapse.
Builders Risk Insurance
Builders risk insurance protects your investment in a project while it's in that perilous period between start and finish. It typically covers materials, fixtures, and equipment being installed during construction. It can also cover materials in transit and at temporary locations.
Builders risk can be written on an all-peril basis, meaning that just about every risk to the project is covered, or on a named-peril basis, where coverage is spelled out in the policy. However, many policies include property coverage against theft, vandalism, fire and water damage, explosions, structural collapse, and weather damage from wind, lightning, and storms.
Most insurance companies allow builders risk policies to be customized so coverage can best protect the needs of the insured.
How Will You Protect Your Tools?
Talk to a licensed construction insurance professional to determine the best types of coverage to protect your tools and equipment, whether they're permanently kept in a warehouse, constantly on the move, or temporarily on the site of a project in the works.