Contractors Equipment Insurance is a type of insurance that covers costly construction tools and equipment. When destroyed or stolen, development can come to a standstill, delaying schedules and affecting the bottom line. Contractors equipment insurance covers movable machinery and equipment used by contractors to accomplish projects.
While conventional commercial liability coverage is adequate for insuring equipment that is at a single, fixed site, it does not cover mobile equipment or goods that move with a contractor.
Does Your Business Need Contractors Equipment Coverage?
If your construction firm moves expensive tools and equipment or borrows or rents equipment, you must have contractor’s equipment insurance. Your tools are the foundation of your business, and if they are destroyed or stolen, having them insured might make the difference between losing and maintaining a job.
Other kinds of enterprises that might consider contractors’ equipment insurance are:
- Transportation/motor truck cargo firms (truck drivers, shipping companies, etc.)
- Special event equipment (speakers and musical instruments)
- Specialized big hauls (solar panels, communication towers, and mobile homes)
- Those who transport or operate medical diagnostic equipment.
Risks such as automobile accidents and theft are not commonplace. Therefore, it is prudent to safeguard your important equipment.
What Does it Cover?
Contractors equipment insurance covers the following:
- Property temporarily in your care or that was borrowed
- Vandalized equipment
- Theft
- Accidents
- Tools and equipment’s in a fixed location, being transferred in a commercial truck or stored at a job site
- Damaged caused by fire, floods, and more
And here are the equipment’s that are typically covered, including:
- Bulldozer
- Power shovels
- Loaders
- Graders
- Backhoes
- Forklifts
- Excavators
- Pavers
- Compressors
- Pumps
- Cables
- And other mobile and portable equipment
If these things are stolen or destroyed in transit or off-site, inland marine coverage will cover the cost (provided the items are not excluded from the policy). Some insurance providers will provide blanket coverage for various tools not specifically included in the policy.
What Does Contractors Tools and Equipment Insurance Not Cover?
Knowing what your insurance covers and doesn’t cover is very essential. There are certain pieces of equipment and property damage that are not covered by contractors equipment insurance.
Here are some exclusions:
- Wear and tear: Contractor’s tools and equipment insurance does not cover items damaged by normal wear and tear, such as a dulled lawnmower blade.
- Breakage or misuse: This policy does not cover deliberate breakage or misuse. For example, if a worker attempts to suck up a large puddle with a leaf blower vacuum, your policy will not cover the water damage.
- Older items: Items older than five years are not eligible for coverage.
- Expensive items: Items priced at more than $10,000 are also not covered by this policy. For example, it might cover a tiny, low-powered tractor but not a top-of-the-line one.
- Vehicle: Commercial auto insurance should cover any vehicles owned by your firm. Hired and non-owned auto insurance (HNOA) is the appropriate policy for leased, rented, and personal vehicles used for business reasons.
Why is Contractors Equipment Insurance Important?
Standard commercial liability coverage protects equipment that remains in one fixed location; however, it does not cover equipment or items that are moved about. Contractor’s equipment insurance bridges this gap by providing coverage for damage and loss to machinery and tools carried from one project site to another.
Who Needs Contractor’s Equipment Insurance?
Anyone who works as a contractor and uses expensive tools or equipment for their job should consider getting contractor equipment insurance. This includes professions like
- Construction workers
- Electricians
- Plumbers
- Landscapers
- Drywall installers
- Concrete contractors
- Carpenters
- Engineers
- Handymen
- Janitorial businesses
- Land surveyors
- Painters
- Photographers
- General Contractors
Does Contractors Equipment Insurance Cover Rented or Borrowed Equipment?
Yes, most contractor’s equipment insurance policies cover damage to any borrowed or rented tools, equipment, or apparel, whether stored on the job site or in transit. Contractors’ equipment insurance will protect you for the duration of your policy.
Frequently Asked Questions
How much does contractors’ equipment insurance cost?
The cost of contractor equipment insurance depends on factors like the value of the equipment, the type of work you do, and where you live. Get a quote from an insurance agent to find out the price for your situation.
How do I know how much coverage I need?
To figure out how much coverage you need, make a list of all your equipment and tools, including their values. Your total coverage should be at least the total value of your equipment.
Can I choose my own repair shop for damaged equipment?
In many cases, you can choose the repair shop for your damaged equipment. Check with your insurance agent to understand your policy’s specific guidelines.
Does contractors’ equipment insurance cover my employees’ tools?
Usually, contractor’s equipment insurance only covers the tools and equipment owned by the business. Your employees may need to get their own insurance to cover their personal tools.
