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Being a good contractor doesn’t just take skill and dedication.  If you want to do a good job, you’re going to need the right tools and equipment to make it happen.  Some power tools might only cost a few hundred dollars, but equipment like bulldozers and excavators are worth much more.  It’s important then to make sure your tools and equipment are insured, that way when one breaks down, you won’t be stuck with the bill.


What Does It Cover?

Typically, anything that is listed on the insured’s declaration page will be covered.  If the equipment isn’t owned by you, for example you lease or borrow it, then you will need to get a rented and leased equipment endorsement.  Additionally, insurance coverage includes less expensive items such as power tools, but only up to a certain amount.  For instance, there might be $10,000 dollars of coverage on tools but no more than $500 for any one tool In particular.  Types of loss included in an equipment insurance policy include but are not limited to fire, explosion, vandalism, theft, collision and overturning.


Options to Consider in Addition to the Basics

There are three options you should think about when purchasing a coverage plan.  Rental reimbursement coverage will give you the ability to continue work by providing you a replacement piece of equipment for the time being, while yours is being fixed.  Reimbursement of income that the insured business loses when the piece of equipment can’t perform the right level of work due to the damaged equipment is another available option.  Finally, blanket coverage, which covers all the equipment for one large amount rather than all the smaller pieces of equipment for smaller amounts.


Purchasing the Proper Insurance Plan

The first step when deciding on an insurance plan for your contracting business is to estimate how much each piece of equipment costs.  This is generally done by taking the cost of repairing the item and deducting the depreciation value.  This is what is referred to as “actual cash value”.  We know that making decisions can be difficult, but keep in mind that equipment is expensive and having the right type of insurance will pay off in the long run.  Don’t just make your decision based on premiums.  Pick an insurance company with a strong reputation and good coverage.  If you have any questions don’t hesitate to contact us today, we will be more than happy to help you out.

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