Business Equipment Insurance

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What our Nerds say about business equipment insurance

RHIANNON

INSURANCE NERD

From laptops to machinery to specialist tools, your business is likely to rely on some key pieces of equipment. Certain items will be crucial to the running of your business, and if they were lost, stolen or damaged you may struggle to carry on as normal.

For example, a web designer is likely to find it difficult to do their job if their work laptop has been stolen. Similarly, if a photographer’s camera was damaged beyond repair they wouldn’t be able to work until they bought a new camera.

This is where business equipment insurance can help. It can cover you if your business equipment is lost, stolen or damaged, helping you to repair or replace the missing or damaged items so you can carry on with your business activities as soon as possible. Rather than needing to pay to replace the equipment yourself, the insurance can help to cover the cost.

What is business equipment insurance?

Business equipment insurance is a type of business insurance policy that covers tools, machinery, electrical items, and other equipment used by your business.

For example, you may be able to get cover for portable items such as:

  • work phones
  • laptops or tablets
  • appliances
  • moveable machinery
  • tools

Having business equipment insurance can help you out if any of these items are stolen or lost, or if they’re damaged in some way.

It offers similar cover to business contents insurance, which typically covers items in your place of work. However, business equipment insurance offers more specific cover for portable equipment that you might take out and about with you in the course of your work.

Business equipment insurance can be added on to a business insurance package or you may be able to take it out as a standalone policy.

What does business equipment insurance cover?

Business equipment insurance covers the cost of repairing or replacing items that are lost or damaged.

The exact items and incidents that business equipment insurance can cover will depend on the insurer. However, you will typically be covered if your equipment is affected by the following:

  • theft
  • fire
  • flood
  • loss
  • malicious damage
  • accidental damage

This insurance should cover your equipment while it’s at your business premises and if you’ve taken items off-site. For example, if you’ve taken your laptop out of the office to a business meeting or if you’re using equipment for a job at a client’s property.

As well as covering the items you own, some insurers will cover you for any equipment you hire. You may need to specify hired-in equipment cover if it applies to your business.

You may also be able to get a limited amount of insurance for items belonging to your employees or any visitors to your premises.

To know for sure exactly what a business equipment insurance policy is and what it covers, you should check the terms and conditions in the policy documents.

What isn’t covered by business equipment insurance?

Business equipment insurance comes with a number of exclusions. For example, you may not be covered in the following circumstances:

  • Your items haven’t been stored securely. Many insurers will require you to keep your items in a locked and secure place whenever you’re not using them.
  • Your equipment breaks down due to wear and tear.
  • There are no signs of forced entry (for a claim for theft).
  • Your claim relates to fixtures and fittings, such as lights, sinks, and other fixed units. These are usually covered by business buildings insurance.

The exclusions to cover will be listed in your policy documents.

Do I need business equipment insurance?

While business equipment insurance isn’t a legal requirement, many businesses may find it useful to have this cover. But the choice is completely up to you.

If you have equipment that’s crucial to the running of your business, you need to think about what would happen if you couldn’t use those items, if they were lost, stolen or damaged, for example.

Without any insurance, you would need to pay for the repair or replacement of your equipment. This could end up being costly and may have an impact on your business finances.

If you do take out business equipment insurance, the cost of repairing or replacing the items would be covered (as long as you meet the terms of the policy). All you would have to pay is the excess (the amount that you agree to pay towards the cost of an insurance claim).This can give you peace of mind that you won’t need to pay the whole cost yourself should the worst happen.

Business equipment insurance isn’t required by law but if you have any employees, you will legally need to take out employers’ liability insurance (with some exceptions).

How much cover do I need?

The level of cover your business needs will depend on your individual situation. You will need to consider the value of the items you want to cover and how much it would cost to replace them.

If you underinsure your equipment, you may not get as much money as you need if you had to make a claim. However, you also don’t want to get more insurance than you need as this would mean you’re paying for unnecessary cover.

As a result, it’s important to spend time working out how much insurance your business actually requires.

Other types of business insurance

As well as business equipment insurance, you may want to consider taking out other forms of business insurance such as:

  • Employers’ liability insurance: This will cover you if your employees get ill or injured at work. Businesses need this cover by law if they have at least one employee, except in certain cases.
  • Public liability insurance: This covers your business if a member of the public, such as a customer or visitor, gets hurt, becomes ill, or dies, or their property is lost or damaged as a result of your business activities.
  • Product liability insurance: This covers you if a product you make or sell causes injury or damage to a third party.
  • Professional indemnity insurance: This covers you if your business offers advice or services that cause damage or loss to a third party. Some regulatory bodies will require businesses in certain industries to have this insurance. Business interruption insurance: If your business is forced to stop trading for a period – due to a flood or fire, for example – this policy may cover any financial losses.
  • Business buildings insurance: If your company owns business premises, this policy will provide cover if it gets damaged or destroyed. Business contents insurance: This will cover the contents of your business premises if they are damaged, destroyed, lost or stolen.
  • Cyber insurance: This can help protect your business from loss or damage to your business’s IT systems and networks – from online threats such as phishing, for example.

How to get business equipment insurance

Before taking out business equipment insurance, you first need to work out the value of the equipment you want to cover. This will help you to make sure you are covered for the full cost of your equipment should you need to make a claim in the future.

You will also need to think about:

  • whether you own or rent the equipment
  • where you can store the items securely when they’re not in use
  • how often you take your equipment outside your premises

When you take out cover, you will usually need to set an excess. Setting a higher excess can cut the cost of your premium, but think about how much your equipment is worth and how much you could comfortably afford to pay.

You can take out business equipment insurance as part of a business insurance package with other forms of cover.

However, you may also be able to get business equipment insurance on its own if this is the only cover your business wants and needs.

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Business Equipment FAQs

How much does business equipment insurance cost?

The cost of business equipment insurance will depend on a number of factors including the cost of the equipment you want to cover and the level of protection you choose. It may also depend on the industry your business works in and the risk your equipment is exposed to.

How much excess you agree to pay if you were to make a claim on your business equipment insurance can also affect the cost of the policy.

Is rental equipment covered?

Yes, business equipment insurance can cover equipment that you rent or hire. With some insurers, you may need to choose a specific type of cover to make sure these items are insured.

If you’re not sure whether a policy covers rental equipment, check the terms and conditions or contact the insurer directly.

Should I get equipment insurance for my small business?

This decision is up to you. Having equipment insurance means your small business wouldn’t need to pay out if items got stolen or damaged, so it could save you money in the long run if something did happen to them. Especially if certain pieces of equipment are crucial to your business, it’s worth considering taking out this insurance.

Can I get insurance for business equipment at home?

If you run your business from home, you can take out insurance to cover your business equipment. A standard home insurance policy is unlikely to cover any items you use for work, so you would need specific business insurance for this.

Is portable equipment covered?

Yes, business equipment insurance can cover portable items, such as laptops, tablets, and other electronic items, as well as tools and other pieces of equipment you need to do your job. Insurers will typically set certain requirements for your cover to be valid, such as storing your equipment securely when it’s not in use.

Is my equipment covered if I store it in a vehicle?

Your equipment might be covered by this policy if it’s left in a vehicle, but it will depend on the provider and how secure the vehicle is. For example, insurers may only cover your item if the vehicle is locked and the item is out of view.

You may need to pay a bit more if you want your equipment to be covered if it’s kept in a vehicle overnight.

About the author

Rhiannon Philps
Rhiannon is a financial writer for NerdWallet, with a particular interest in personal finance and insurance guides for consumers. Read more
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