Commercial construction professionals rely on various tools, machines, and equipment to get the job done. Whether handheld or weighing several tons, these tools enable workers to tackle ideas and large-scope projects better than they could with their hands alone.
However, construction sites can be hazardous places, and these essential tools that keep a project on track may become damaged or even destroyed. The cost of repair or replacement will come directly out of the construction company or contractor’s pocket unless they have secured a robust equipment and tools insurance policy.
A thorough understanding of how equipment and tools asset protection works in commercial construction insurance ensures everything you need is covered.
What Equipment And Tools Does Commercial Construction Insurance Cover?
As the name implies, equipment and tools insurance is a type of protection commonly added to an overarching construction insurance policy (such as a business owner’s policy) that safeguards against financial losses or project interruption due to damaged tools and equipment.
This type of security falls within the scope of inland marine protection, covering tools as a professional carries them across multiple job sites or stores them between tasks.
Equipment and tools asset protection does not cover every possibility that may befall your items, but it can protect against the most common issues. These include theft, either from a worksite or the professional’s home or place of storage.
It typically also covers items stolen while the worker is in transit, such as if they stop for gas. If the items are vandalized rather than stolen, they can still be replaced, or insurance can assist with removing the graffiti, even if the tool still functions.
Equipment and tools protection is primarily used to receive compensation for broken or damaged materials. If a contractor’s hacksaw breaks during a renovation project, insurance can pay for a new one based on cash or replacement value, depending on the policy’s details.
What Equipment And Tools Does Commercial Construction Insurance Not Cover?
Many unfortunate circumstances can occur in the equipment used at a construction site; not all will be covered by insurance. Regular wear and tear that gradually ruins tools is not covered, so most equipment and tools insurance policies will only insure items within a specified timeframe (typically five years).
Additionally, if insurance can prove that the item was misused and this behavior resulted in the damage, they will not cover the replacement cost. This prevents workers from intentionally damaging their equipment to receive a newer replacement or use the item for non-standard use.
Most equipment and tools policies will exclude items above a specific value. While this number can fluctuate based on the policy details, it typically covers equipment up to $10,000. Inland marine or other equipment insurance may be necessary for more expensive items.
How Much Does Equipment And Tools Asset Protection Cost?
Because equipment and tools insurance covers less expensive items that are not too old, the cost to the insurer of repairing or replacing the item is typically fairly affordable.
As a result, tools and equipment protection is an inexpensive option for contractors, too, especially when bundling with a business owner’s policy, contractor insurance, or other types of protection from the same agency.
Equipment and tools protection can be affordable, averaging less than $20 monthly. Policies that compensate for replacement value may be a few dollars more expensive than those working on cash value, as replacement value tends to compensate for slightly more.
What Is Equipment Breakdown Coverage?
Many construction teams wonder whether equipment and tools insurance is necessary if they already have equipment breakdown coverage (and vice versa). Both can be valuable when used simultaneously. Equipment breakdown coverage is more targeted toward the failure of large machinery rather than smaller, less expensive tools.
It focuses on mechanical issues rather than theft, vandalism, and other possibilities covered in tools and equipment protection. It’s the difference between insuring a chainsaw and an HVAC system—both are important, but they need different types of coverage.
Get Commercial Construction Insurance That Protects Your Equipment Protection From Burton & Company
Commercial construction teams rely on their various tools to complete the job on time. When these tools break or are stolen, the entire process can halt without insurance coverage.
The experts at Burton & Company work with commercial construction crews to create the ideal mix of equipment and tools for asset protection alongside contractor’s insurance, equipment breakdown coverage, and more.
Contact Burton & Company to discuss your concerns and collaborate on an ideal blend of insurance for your business.
