Everything You Need to Know About Insuring Your Contractor’s Equipment

October 18, 2021

When your contractor is at a job site, their equipment is often one of the most important assets. Still, many contractors don't realize that they need to insure their equipment to protect themselves financially if it gets damaged or stolen.

Understanding how to insure your contractor's equipment is a critical part of protecting your business. It's not something you want to leave until the last minute, so it's best to have a look at your insurance needs before any issues arise.

Here's a list of some important things that you'll want to consider before insuring your equipment.

What is a contractor’s equipment policy and how does it work?

A contractor's equipment insurance policy is often characterized by three parts: commercial property, business income (or extra expense), and physical damage. These policies will cover the necessary tools of your trade for both bodily injury or property damage. Most of these types of policies have limits on a per-item basis rather than on an overall total value.

Consider what you need to cover to protect your business well. It's a good idea to list out everything that appears on invoices and receipts so that you can get good coverage for items such as ladders, scaffolding, and lifts. Also, remember that commercial property insurance does not cover damage due to fire or explosions, so you'll need to add on a fire policy if that's a concern for your business.

How do I get a contractor’s equipment policy?

Getting a contractor's equipment policy can be a bit more complicated than getting general liability insurance because you will need to list out everything covered by the policy. You will also need to add on extra coverage such as fire or vandalism if it pertains to your business in any way.

It’s a good idea to get general contractor's liability insurance online since that’ll save you valuable time and protect you from a wide range of construction accidents and basic risks. Additionally, this insurance can help you pay for property damage, legal fees and judgment, and medical payments.

Why should I get a contractor’s equipment policy?

Here are a few reasons that you should consider insuring your contractor's equipment:

  • If you had to replace your equipment on your own, it would cost you thousands of dollars. It's much cheaper to get insurance than pay for these items out-of-pocke. CooperBuild
  • When you do not have contractor’s equipment insurance, your business can be put into financial turmoil if tools or materials are damaged or stolen by an accident or an act of vandalism.
  • You are held responsible for any injuries that result from you not having insurance, so it is in your best interest to have the right coverage.  NYC General Contractor 

What are some common items covered by contractor’s equipment insurance?

Some of the most commonly covered items under a contractor's equipment policy include:

  • Saws and power tools
  • Scaffolding equipment such as ladders, scaffolding, and lifts
  • Lawnmowers and other landscaping equipment

Even if your contractor uses any of the above items on the job site daily, you will need to list each item individually to add coverage. If there are any questions regarding whether or not certain items are covered, ask your insurance agent to find out.

Tips on how to save money on your contractor’s policy

There are a few ways that you can save money on your contractor's equipment insurance:

  • Increase your deductible. A higher deductible means that you'll pay more out-of-pocket if anything happens to tools or materials, but it also means lower premiums.
  • Ensure you have the right amount of coverage. If over-insurance is an issue for your business, you may not want to insure items that are rarely used or hold little value. This way, you can save money on premiums while still being covered.
  • Report items as they are purchased. If you add on extra coverage for any new equipment, make sure it gets reported to the insurance company right away. Even if an item is not specifically listed on a policy, your insurer may cover that type of item under certain circumstances.

Final thoughts

Even if you don't have the most advanced equipment on the market, you've still spent a lot of money to get your business started. When you insure your contractor's equipment, you are protecting both your business and the job site.

Insure any items that would be costly to replace or repair yourself if they were damaged or stolen. Protecting your business is crucial for its success, so hiring experienced insurance professionals can help make sure that this task gets done right.

Carlos Diaz
I believe in making the impossible possible because there’s no fun in giving up. Travel, design, fashion and current trends in the field of industrial construction are topics that I enjoy writing about.

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