Restoration Insurance Tips: Is there Insurance Coverage Available for Tools?
A contractor’s tools and equipment are often the lifeblood of their company. Loss or destruction to their tools could mean a tremendous loss to the company and its revenues. Given that fact, we are often asked about providing insurance coverage for tools and equipment that are located in our clients’ vehicles or even left at a job site.
The first place most people start to insure all of their property is through a standard property policy. And a property policy is great for personal property, inventory, including tools and equipment, and machines – as long as the property never leaves the premises. A property insurance policy only provides insurance coverage for property as long as it is located within a 1000 feet of the location listed on the policy. Most property insurance policies exclude any property that is located away from the premises, whether it’s in a company vehicle or located a job site.
How Do Restoration Contractor Insure Their Tools?
For restoration contractors a standard property insurance policy just isn’t sufficient enough to cover their tools and equipment. As most of their tools and equipment are usually inside a company vehicle or at the actual job site. For restoration contractors, we recommend purchasing a miscellaneous tools floater and/or an equipment floater to properly protect your property that is located away from the premises.
What Is a Miscellaneous Tools Floater?
A miscellaneous tools floater provides coverage for tools and other small equipment while it is away from your premises. The policy is designed to cover smaller pieces of equipment (less than $2,500 in value). In fact, most policies will actually cap the amount they will pay per item at an amount between $1,000 – $5,000. One of the benefits of the misc. tools floater is that some policies will even provide additional coverage for employees’ tools while they are in a company vehicle or located at a job site as well.
What Is an Equipment Floater?
An equipment floater provides essentially the same coverage as the miscellaneous tools floater, but it is designed to cover larger tools and pieces of equipment – $5,000 in value and above. Typically, you will schedule your pieces of equipment on this type of policy by listing the type of piece, year, make, model, and replacement cost value. Your premium is then calculated based upon the replacement cost amount listed on the equipment schedule.
Adding a misc. tools floater or equipment floater insurance policy is actually quite simple. The easiest way is to take your existing inventory/equipment list and determine which items can be placed on the tools floater and which pieces need to be scheduled on an equipment floater. From there you can work with your agent is providing you with insurance quotes on the items.
If you are a restoration contractor interested in insurance quotes for your equipment please feel free to give our office a call.