equipment insurance
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Next to workers, a contractor crew’s tools and equipment are the most important component of their business. They are the lifeblood of the company; if something happened to them all at once the business would have to halt while they spent the cash to replace everything.

While a catastrophic disaster that wipes out all of your tools is unlikely, a single piece of equipment worth tens of thousands of dollars getting broken happens all the time. These incidents can be ruinous to a business if they occur during a financially vulnerable period, such as when materials have just been purchased and reimbursement is weeks down the road.

To prevent having your business grind to a halt while you scrounge up money to replace valuable equipment, have it protected with a contractor’s equipment insurance policy. These policies cover tools and heavy equipment that other policies will not cover. Any business that has invested thousands of dollars in their equipment should protect that equipment and their entire livelihood with a contractor’s insurance policy.

Equipment Insurance Covers What Other Policies Will Not

Contractors and business owners in general will have several insurance policies in place at once. All the different overlapping and exceptions to coverage can prove quite confusing.

One of the biggest points contractors become confused about concerns the tools and heavy equipment they use. They may assume that their commercial property insurance covers all aspects of their trade tools. The reality is that since most construction happens in many different locations, property insurance does not cover the majority of incidents that can occur. Under the property policy, only claims that happen at the address listed will be covered.

Equipment insurance covers assets that are being moved between locations, known as “mobile equipment” that does not fall under commercial automobile insurance. Items such as power tools, bulldozers, loaders and others that are all ineligible under other policies will all be protected financially with a contractor’s equipment policy. This policy even temporarily protects equipment you have borrowed or rented.

Coverage often includes loss due to:

  • Theft
  • Vandalism
  • Equipment overturning
  • Explosions
  • Electrical surges
  • Possibly even floods and earthquakes

A contractor can also add to or modify the policy to suit their needs, including options like:

  • Rental reimbursement coverage that will cover the cost of temporary substitutes in between item replacement
  • Reimbursement for lost income as a result of equipment destruction
  • Extended coverage limits in a blanket insurance policy that covers all items under one large amount

As Indispensable as the Tools Themselves

Businesses protected under equipment policies will enjoy a greater peace of mind knowing that they are covered in most situations. Even other professions like municipal governments and non-construction organizations that use heavy equipment or expensive tools can secure an equipment policy.

Anyone interested in procuring such a policy should talk to an agent to discuss the finer details of how much coverage they will need. Decisions to make include whether to cover actual cash value of items or full replacement value that ignores depreciation. Policy purchasers can also decide whether to increase their deductible or eliminate coinsurance clauses with “agreed value” coverage.

Get in touch with an agent today to protect your most valuable assets and keep the project going even after a major setback.

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