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Safeguarding Your Valuable Equipment & Tools

Safeguarding Your Valuable Equipment & Tools

Tools and equipment you use for your business can sometimes be an afterthought when it comes to your insurance coverage.  You probably think they are covered under your property insurance contents coverage, but are they?

They probably aren’t.  Office equipment usually stays in one place, and is subject to the same risks as the building.  Contractors’ tools and equipment move around from job site to job site in trucks and on trailers, and they are more likely to be stolen, lost, or damaged.  Contractors’ equipment can often eclipse large office equipment in terms of replacement cost.

This is why contractors’ equipment coverage (sometimes called inland marine coverage) is essential to your business.  Without your tools and equipment you can suffer job delays and catastrophic financial losses.

Insure Your “Big Ticket” Equipment

Smaller tools may only cost a few hundred dollars to replace, and those may be things you aren’t worried about.  The equipment you should consider insuring on a contractors equipment policy are the big ticket items: backhoes, tractors, bulldozers and other large pieces of equipment.  These items can be owned, leased or rented at the time they are insured.

When you insure your larger tools, you can shop a range of policies with broad coverage options. Equipment coverage found through an insurance broker is often broad enough to include limits for smaller tools – tools that you wouldn’t otherwise insure.

Keeping Up With Changing Coverage Needs

Determining how much equipment coverage you need can be tricky, partly because the answer may change from week to week.  You should take into consideration:

  • Changes to your owned equipment
  • Changes to your leased or rented equipment
  • Upcoming future leases or rentals

You should also make note of any equipment you own that you lease to others, the amount of tools and equipment you have on hand that aren’t included in the large equipment schedule, and any tools owned by your employees that they use on the job (these can also be covered).

Tips For The Cost Conscious Contractor

  1. Some leasing and rental companies do offer insurance coverage, but it is more cost-effective to get your own policy.  The coverage options to you through a broker are often wider, with lower deductibles and premiums.
  2. Take care of your equipment by following best practices for maintenance and storage.  It helps to have an experienced risk manager who can help you prevent common problems.
  3. Don’t let your assumptions about big equipment hold you back. Getting the appropriate equipment and tools can accelerate the growth of your business, providing you have the right coverage!

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