Trade Business Insurance: How to Get the Best Cover For Tools

Posted on: 22 August 2018

Your trade business insurance has a lot of important benefits; however, one of the most important is your 'tools of trade' coverage. Your tools aren't just valuable to you but are attractive quick earners for thieves; they may also get lost or damaged. The problem is that if you don't have your tools, then you can't work until you replace them.

While trade insurance policies include tools coverage, not all policies have the same benefits. To make sure you get the right coverage, think about what kind of protection you need.

What Are You Covered For?

While theft may be your main worry here, there are other things that can happen to your tools. For example, you may lose a tool, or it may get accidentally damaged on site or at a customer's house. Look for policies that cover all these options.

Where Are You Covered?

Think about where your tools are taken to and stored. Your policy should apply to any location you use. For example, look for coverage for your van, business premises, home and customer properties. If you work as a subbie, then you need site coverage; if you employ other people, then their vehicles and homes may need to be included.

Tip: Keep an eye out for storage clauses. Your insurance company may only cover tools if they are kept in locked vehicles or secure storage. If you don't meet these clauses, you may invalidate a claim.

Will the Policy Cover All Your Tools?

It's important to get insurance of a high-enough value to cover the costs of replacing all your tools. After all, if someone steals your van with all your tools in it, then they will all need replacing.

Also, remember that some insurers require you to list high-value tools or equipment separately before they're protected by the policy. Bear in mind that tools of trade coverage doesn't always automatically include electronic tools like mobile phones. You may need to add these to your business insurance separately.

What Kind of Replacement Do You Get?

Don't assume that all coverage options will pay enough for you to buy new tools after a claim. Some coverage pays on a depreciation basis—this effectively values a tool based on how much it is worth after you've used it. To get enough to buy new tools, look for new-for-old cover.

To find out more about finding the right tools of trade policy, ask your business insurer or broker for advice.