Protecting Your Tools – Find the Tool Insurance That’s Right for You

Tool insurance is crucial for anyone who uses tools for their work. Tools are usually the biggest expense for any trade based activity so it is important to make sure you are covered for theft and damage should the worst happen. There are a number of different types of tool insurance in the UK and cover can vary. So let’s check out tool cover insurance to find out what you need to know.

What is tool insurance?

Tool insurance covers the cost of replacing your tools if they are stolen, lost or damaged such as by fire, flooding or other unforeseen circumstances. Accidents can happen of course but the biggest risk to your tools comes from theft.

According to leading tool supplier Ironmongery Direct, more than £100 million of tools were stolen in the UK between 2020 and 2021.

To put this into perspective, crime statistics show that on average a van gets broken into every 23 minutes. This means that there is a strong chance that it will happen to you. If it does, your business will be seriously impacted. You will not be able to continue with your work until you have replaced your tools. Days of lost work and the cost to replace what you’ve lost could run into thousands.

Not all tool cover insurance is the same. It pays to shop around to find the cover that is best for you. Some tool insurance policies cover you for lost earnings for example; others may have exclusion clauses that may prevent pay out following a loss, other tool insurance cover may not be sufficient for your needs if your tools are expensive.  This means that it is crucially important to understand the small print of any type of tool insurance policy before you commit to it.

What kinds of tools will tool insurance cover?

Tools and equipment insurance will cover any tools that you use in your business. Tools can refer to any type of equipment used in your line of work so can refer to laptops and electronic equipment but more usually tool insurance applies to any tool used in trades such as building, plumbing , gardening and carpentry.

Common categories include;

  • Hand held tools such as hammers and screwdrivers
  • Power tools such as angle grinders, power drills and sanders
  • Plant equipment such as diggers and rollers
  • Tools that may be leased or hired.
  • Gardening equipment such as chain saws and power strimmers

What is tools in transit insurance?

Tools in transit insurance protects your tools while they are in your van when driving, loading and unloading and even while they are left overnight – as long as they are kept in a safe place such as a locked garage.

Many tool thefts occur when the van is left unattended so it is important to follow the security requirements of your policy, if you leave your tools in your van.

Many insurers will cover you for tool theft, if you leave your van on your driveway and your van is fitted with an alarm. Your best bet is to ask your insurance company for details regarding your tools in transit policy to ensure you’re well protected.

How does Tool Insurance work?

Tool insurance covers you for the cost of replacing or repairing your tools, if your equipment is damaged, lost or stolen. It is important to ensure that the amount you are covered for reflects the value of the tools.

What do I need to consider when choosing the right tool insurance?

It is important to make sure you have the right tool insurance in place that matches your needs and is not overly expensive. This comes down to four key factors.

1. Monthly costs and possible exclusions

The monthly costs will depend upon your cover so it is important to find the sweet spot that offers you protection should you need to claim but is not overly expensive.

It’s also important to check what is excluded in your policy. Exclusions might include:

  • Wear and tear
  • Deliberate damage
  • Manufacturing faults – these should be covered by the manufacturers warranty
  • Confiscation of tools by police
  • Cosmetic damage
  • Leaving your van unattended in an unsafe area i.e. not kept in a secure space overnight as outlined by the insurance policy

2. Value of your tools

It is important to set a realistic value on your tools. For example, tool insurance may be cheaper if the value of replacement is set at £1000, but this won’t protect you if your equipment costs £10,000 to replace.

It is therefore important to set the correct level of value on your tools or equipment to ensure that you are not out of pocket should you need to make a claim.

You should also ensure that your insurance policy offers, “new for old “cover so that the depreciation of your tools is not reflected in the final settlement.

3. Working from home

If you work from home, you may find your household insurance covers you for your tools. For example if you have a small engineering workshop in your garage or have a carpentry workshop which you run as a home business.

In many cases your household insurance may cover you for your tools but it is important to find out whether or not you need additional cover before you need to make a claim.

4. Your Work Van

If you use a van for work, your insurance policy may cover you for your tools but it is important to check this out before you need to make a claim. In addition it is important fit your van with alarms, extra security locks, and park it in a secure place overnight.

Top Tips to keep your tools safe

Prevention is better than a cure so always keep the following tips in mind:

  1. Be careful where you store your tools. If you can unload and store expensive tools in a locked space in your home overnight it will be safer. And follow the requirements of your policy by keeping your van in the garage or on the driveway.
  2. If you need to park your van in a public area while you are going about your work, try to ensure that there is CCTV operation in the area. Keep the van locked and never leave it unattended when the door is open.
  3. Protect your tools in your van with lockable cabinets and a security alarm system and place security stickers on the exterior of your van to deter opportunistic thieves.
  4. Make your tools less appealing to thieves by removing brand plates and by marking them with your initials in neon spray paint.
  5. Catalogue your tools and keep the receipts. That way you will know exactly what is missing should you have a break in and it will be easier make your claim should the worst happen. Always keep a note of serial numbers and model numbers.

Conclusion

Tool and equipment insurance is crucial. Theft from vans is sadly a very common issue so it’s not worth leaving your van and tools security to chance.

In some cases your tools may be covered by your motor insurance, public liability insurance or home insurance but it is important to know exactly what you are covered for, should the worst case scenario arise.

Always read the small print of your tool insurance policy and if you have any doubts about your cover, contact your insurance company before you need to make a claim.

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